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Is Forex Trading Halal In Islam?


Is Forex Trading Halal?

The question of whether Forex trading is permissible under Islamic law is a difficult question to answer conclusively. While Islamic authorities certainly agree that Forex trading under certain conditions is halal (i.e., permissible according to Islamic law), there is some controversy as to exactly what conditions.

Sharia laws prohibit the acceptance of specific interest or fees for money lending (known as riba or usury), whether the payment is fixed or floating.

Forex trading in Islam must have an immediate effect so that it can be a natural part of trading that is permitted by Islamic law. Therefore, Muslims must conduct their forex trading based on fundamental and technical analysis.

However, all Muslim forex trading accounts must uphold Islamic laws. Usury, involving the payment of interest, should be avoided and should not be considered gambling.

When we talk about whether forex trading is halal or haram, it is very important to consider that forex trading is an activity that must be done very consciously and in the best possible way. In reference to forex in Islam, each trader must always comply with the rules that his religion raises.

Therefore, the doubt for those who wish to be forex traders and belong to the Islam religion must be resolved when we consider that the forex is either haram or halal depending on how it is done and under what entity we do it.

Doing business is Halal, how do You Trade Forex Halal Way?
Trading Forex should be treated as a business. If you are starting a business, as an entrepreneur you will be risking your investment with the hope or perhaps expectation of making money later. Essentially speaking if something wrong happens (in startups case 90% of the new businesses) you will lose your money and your business will fail.

However, the risk of doing business does not hold innovators backward. In fact, the riskier the economy the more startup attempts we can see.

(الغنم بالغرم)
The right to profit belongs to whosoever bears the risk of loss.

So, as a trader, you can take a similar approach to establish a new business. Let’s go through the details below.

Forex is Halal IF

Forex is Halal if you are not gambling and have your end goals distinguished.

1- As a Forex trader you need to have a reason to take action in the market (sell or buy);

2- You can not gamble on the trend direction but analyze the market;

3- You can not trade for the sake of excitement. Treat the market as a real business, trade for the potential income, and make a living;

4- Do not approach it as a game but as a job;

5- Have a mindset to win or to protect your equity;

6- Do not tell yourself “if we win otherwise next time”;

7- You have to learn from your losses.

8- Do not revenge trade! Move on with your loss-making decision, rather than blaming the market or blaming the situation

9- You must have a SWAP free account or trade avoiding SWAP

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