Answer to the question, Is forex trading halal or haram? It can be both concerning the trader’s intent and behavior. As a Muslim forex trader, you must trade with an authentic strategy and mind frame with discipline, log in with an Islamic account, and then follow all their instructions and limitations.
But if you trade with no discipline and a regular interest charging account, then you may play gambling. That is forbidden in Islam and considered as haram act. Let’s know in-depth detail of is forex trading halal or haram.
What does Halal mean in terms of forex trading?
In Islam, “halal” is an Arabic word that is used for the acts that are permitted and consistent with the Islamic laws. In terms of forex trading, halal and haram highly depend on speculation. A more common process is derivative contracts, where you don’t own currency, but you may speculate over currency movements.
On the other hand, a forex trader who can speculate over currency fluctuations uses forex to monitor their skills. That type of trader invests in Islamic forex accounts and stays consistent with all Islam’s policies and ethical laws. So, they can earn purely halal.
Suppose an in-car race, and you will bet with your friends for currencies. This is the way that lets your forex trade in a non-halal category. But if you are betting on a horse race to monetize their skills against others, it will be halal.
Islamic Forex accounts
Many forex brokers come with Islamic accounts for Muslims that let traders stick with Islamic rules and regulations while investing. They also follow the sharia law that frames the rule of economic justice. Moreover, there are best forex brokers in South Africa that offer Muslim accounts and follow all the principles of Islam.
Furthermore, Islamic swap-free accounts that don’t pay or charge any overnight interest on position kept open over 5 pm New York time that is normal practice in the forex market. But these accounts eliminate the factor of Riba from forex and make it more suitable for Muslim traders.
Is forex trading a gambling?
Forex trading is a gambling or halal totally dependent on the Investor’s intentions and actions. If a trader uses the analyzed method for a certain currency pair with brighter historical value, it can be risky. But not haram or gambling as the intentions are so clear and understood at the outset. Moreover, if your profits and not strict to sharia law investment, that could occur into the haram act.
As we mentioned above, is forex trading halal or haram? It’s up to the Investor’s way of speculating. While, if it’s not difficult to become a successful trader while following Islamic laws and policies. If you are Muslim, go with the Islamic swap-free accounts that help you stay consistent with Islam while investing. So, do solid research over Islamic accounts, acknowledge their rules, and then invest accordingly.