Forex Trading - Halal or Haram Fatwa استمتع بجميع مزايا الحساب العادي من خلال حساب متوافق تمامًا مع الشريعة الاسلامية افتح حسابك الان! Usury is of course completely prohibited in Islam, and is defined very widely. This implies that any kind of deal or contract which involves an element of interest riba is not permissible according to Islamic law. Islamic Forex Brokers For a long time, retail Forex brokers reflected the market practice of paying or charging to the trader the interest differential between the two components of any currency pair whose position remains open overnight.

You might ask how they did so and maintained the profitability of their operations. This was achieved by charging increased commissions in spot Forex trades, and this practice has become the hallmark of nearly all Islamic Forex brokers.

Arguably, this in itself is just a camouflaged interest component, and if this view is taken, it makes Forex trading problematic according to Islamic law. The interest problem also eliminates any possibility of trading Forex forwards, as there is always an interest element involved in these transactions.

Forex Brokers We Recommend in Your Region See full brokers list 1 Read full review Get Started What Islam Says on Online Forex Trading Having reduced the issue to one of trading spot Forex and assuming there is no interest element deemed to be involved, we move onto the next issue. So clearly, the Prophet Mohammed peace be upon him had in mind exchanges of different types of commodities that would be made between two parties, recognizing that this was a natural and just aspect of commerce. What Qualifies as "Hand to Hand"?

In fact, one could extrapolate that it was natural and accepted for a deal to made between two different parties. In modern times, it can be argued that in regards to Forex trading, the deal is made between a Forex broker and a trader, so this would qualify under such a definition of two different parties, which would be permissible according to Islamic law. We would seem to be on solid ground here, as when a trade is made with a Forex broker, it takes effect immediately.

Interestingly, this could suggest that all non-market trades i. stop or limit orders are haram! Speculating vs. They are simply speculating that the value of one with go up and the value of another will go down.

Is such speculation permissible according to Islamic law? This is an extremely difficult question to answer and it may be one that should be discussed with your own religious leader rather than being decided base on an internet article.

We can start by saying that Islam recognizes that nearly all adult human beings strive to improve their financial positions, and that life involves a large element of uncertainty. In life we are confronted with many choices, the outcome of which is unclear, and we strive to use intelligence and skill in choosing the available option that will produce the superior outcome.

However, we then must go on to say that gambling is strictly forbidden by Islamic law, even as a form of recreation or entertainment when undertaken with small monies which the gambler might be said to be able to afford to lose. In measuring these two competing elements, it can be said that it is the method of speculation that makes the difference.

One author has examined the subject and stated that speculation on the basis of fundamental analysis is permissible, but technical analysis is not, and an interesting reasoning is given: placing trades based on technical analysis is essentially tantamount to betting on the bets of others, and relying upon the behavior of the crowd to influence your speculation is drenched with the essence of gambling, which is forbidden by Islamic law.

However, this argument can certainly be criticized as spurious as related to market realities. For example, is a speculator who believes that the U. Dollar will rise against his Euros due to economic fundamentals bound to simply make the trade immediately, and forbidden to take any action to time the trade entry to a psychologically opportune moment?

A stronger argument could be made that a Muslim has no business speculating on the currency markets unless he or she has a firm basis upon which to anticipate success. This would mean that trades must involve either some element of fundamental analysis or technical analysis which the trader actually has a firm reason to believe in. One example might be trend following trends that have an academically established track record as a profitable trading method in liquid financial markets, and trading these trends using Islamic FX Brokers.

That edge is gained by studying at least one of two fields, known as technical analysis and fundamental analysis. The former involves looking at currency charts, seeking out certain patterns using tools and software known as price action and indicators to help determine which way a particular forex pair may meander.

By extension, the latter involves focusing on the latest news reports and geopolitical situation of the countries involved. Forex trading is the buying and selling of foreign currencies with the aim of generating a profit. Read this Term in Saudi Arabia is a platform in the Kingdom. Despite the overall positive news for the market, the regulatory permits regime in Saudi Arabia could be the privilege of carefully selected few companies.

Riyad Capital is a subsidiary of Riyad Bank, which is the third largest financial institution in the country. The Saudi state owns 51 percent of the bank. With the first regulatory license now on the table, it remains to be seen whether other companies would be able to apply and secure the lucrative permit. While Saudi Arabia has been opening up its capital markets over the past several years, its progress has been slow and the country is still tightly controlled by the state.

The country and financial markets locally have long been preparing for the IPO listing of the biggest state-owned company Saudi Aramco. Saudi Arabia has also been making headlined in the cryptocurrency space. This Gharar is in the interim of a transaction and a component of the actual trade.

This is different to purchasing shares, as one actually purchases a known subject matter. The transaction of purchasing shares is therefore free of Gharar. Uncertainty in shares is therefore ex-post, whilst in FX trading it is ex-ante and during the trade.

Further, an FX trade does not involve any valid Shariah compliant commodity. One is taking a position on the movement of a currency pair. This is a Qimar gambling transaction as one is staking his wealth against his broker. The one who speculated correctly makes a profit at the expense of the other.

In futures transactions, because neither counter-value, is present at the time of contract, it is a mere exchange of promises. Futures trading, where both counter-values are deferred, is exchange of one debt for another, i.

The deferral of both counter-currencies results in a deferred transaction. Deliverable Forex, which is open to companies and big firms, is different. In deliverable FX, there is actual trading of currencies. Deliverable FX has the potential to be Shariah compliant if other requirements of Shariah are fulfilled. We have previously written extensively on forex here and here.

This writing is shaped by experience of working with forex companies as clients during our previous careers as lawyers. We would strongly advise against getting into forex for Muslims, but also for non-Muslims due to the deep risks attached to it. Forex is at heart a financial instrument as opposed to dealing in the currency itself and for it to be worthwhile there is leverage involved.

Most people who engage in forex lose money — and they lose it to people like eToro and other providers who can make money off losing trades. If you would like to learn more about each investment and how to structure your investment strategy - check out Halal Investing Course here.

AsalamuAlaykum, I was just enquiring about Vantage FX who claim to offer Islamic Forex accounts and are SSB Approved. In regard to Vantage FX, I had discussed this matter with them and their Shariah board a few months ago, they gave me the following reply:.

The Vantage FX products have been certified by the Shariah Board and headed by Sheikh Hasan Qamra from Kuwait. With regards to your specific queries, we can confirm all the laws and principles of Bay al-Sarf are applied to all transactions including that of Milkiyyah and Taqabudh.

This is done via actual liquidity providers through operational mechanism approved by the Shariah Board. Vantage FX serves as the agent Wakeel on behalf of the traders to manage the actual liquidity provided by the liquidity providers and such funds are segregated in a specific bank account. All the trades are executed in real time and have a direct effect on the real market. That is a matter for you to consider. Jazakallah for the reply. From what they have mentioned in their Q and A, does it appear to be Sharia compliant?

I have been enquiring alot from vantage FX about what they offer but due to my ignorance in this field, I am unable to judge weather it is permissible or not. I believe more transparency is required on how things actually work.

The ever-evolving and ever-growing marketplace in the Middle East is getting even more attractive as new regulatory jurisdictions continue to emerge. The latest news from the region concerns one of the most populous countries in the area - Saudi Arabia.

The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading. With regards to freely floating currencies, this is determined by supply and demand, such as imports and exports, and currency traders, such as banks and hedge funds. Emphasis on Retail Trading for ForexTrading the forex market for the purpose of financial gain was once the exclusive realm of financial institutions.

All one needs is a computer, an internet connection, and an account with a forex broker. Of course, before one starts to trade currencies, a certain level of knowledge and practice is essential. Once can gain some practice using demonstration accounts, i. place trades using demo money, before moving on to some real trading after attaining confidence. The main two fields of trading are known as technical analysis and fundamental analysis.

Read this Term brokers. Yesterday, on April 25, the country became even more attractive after issuing the first forex broker license. The Saudi Capital Markets Authority granted the first official permit to Riyad Capital. The company confirmed the news via its verified Twitter account around a local financial industry conference in Riyadh. The newly licensed broker for Forex Trading Forex Trading Forex trading is the buying and selling of foreign currencies with the aim of generating a profit.

The value of currencies, especially floating currencies, fluctuate to varying degrees. This constant volatility of exchange rates opens the door for speculators to invest in a certain currency against another. It goes without saying that forex trading is a very attractive market for not only banks and hedge funds, but even for the small individual trader, due to the low barriers for entry.

One literally only needs a computer with an internet connection, and some money deposited with a forex broker. its exchange rate moves to 1.

A lot of time and effort is needed to practice trading on demo and eventually on real accounts. No doubt it takes dedication, discipline and patience, along with developing an edge to beat the market. That edge is gained by studying at least one of two fields, known as technical analysis and fundamental analysis.

The former involves looking at currency charts, seeking out certain patterns using tools and software known as price action and indicators to help determine which way a particular forex pair may meander. By extension, the latter involves focusing on the latest news reports and geopolitical situation of the countries involved. Forex trading is the buying and selling of foreign currencies with the aim of generating a profit. Read this Term in Saudi Arabia is a platform in the Kingdom.

Despite the overall positive news for the market, the regulatory permits regime in Saudi Arabia could be the privilege of carefully selected few companies. Riyad Capital is a subsidiary of Riyad Bank, which is the third largest financial institution in the country. The Saudi state owns 51 percent of the bank.

With the first regulatory license now on the table, it remains to be seen whether other companies would be able to apply and secure the lucrative permit. While Saudi Arabia has been opening up its capital markets over the past several years, its progress has been slow and the country is still tightly controlled by the state.

The country and financial markets locally have long been preparing for the IPO listing of the biggest state-owned company Saudi Aramco. Saudi Arabia has also been making headlined in the cryptocurrency space. the country's central bank has been working in conjunction with UAE monetary authorities to create a joint token. FM Home.

Join the community of 1. Bond Brokers. Best Crypto Apps. Ava Trade support staff can guide you through the account opening and verification process so that you can jump into trading quickly. Mutual Fund Brokers. Saudi Regulated Forex Brokers — Forex trading in Jeddah Saudi Arabian Monetary Authority SAMA is the regulatory body in Saudi Arabia that regulate the Forex markets and Saudi Forex brokers.

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