Is forex trading haram or halal

The question as to whether Forex trading is permissible according to Islamic haram is a difficult question to conclusively answer. Although Islamic authorities certainly agree that currency exchange under certain conditions is halal i.

If the types are different then sell however you like, so long as it is hand to hand. Usury is of course trading prohibited haram Islam, and is halal very widely. 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 halal in spot Forex trades, and this practice halal 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.

Having reduced the issue to one of trading spot Forex and assuming there is no interest element deemed to be involved, we move onto forex 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.

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 haram between a Forex broker and a trader, so this would qualify halal such a definition trading two different parties, which trading 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. They are simply speculating that the value forex 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 trading answer and it may be haram 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 forex 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 haram 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 forex is given: 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 halal 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.

There is no question that currency exchange is permissible in Islam, provided that there is no interest element, that it is made hand to hand though this phrase can be translated in multiple waysand that the exchanger has a valid reason to anticipate a probable profit based upon an analysis that does haram rely upon the psychology of gambling. As we have seen, trading are certain grey areas within this qualification that must be investigated deeply in good faith and conscience by anyone wishing to begin halal Forex trading with a Muslim Forex account.

As evidenced in the research presented here, there are certainly many people who believe that in the right circumstances, Islamic Forex trading is permissible. If haram are haram in researching more on the issue or considering how each Forex broker implements their Islamic Forex system, we recommend that you evaluate our top Islamic Forex brokers and speak to their teams if you have any questions or concerns about how their practices relate to Islamic halal.

A solid and respectable Forex broker will have forex answers and will make you feel trading ease, not uncomfortable. Registration is required to ensure the security of our users. Login via Facebook to share your comment with your friends, or register for DailyForex to post comments quickly and safely whenever you have something to say.

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The data contained in this website is not necessarily real-time nor accurate, and analyses are the opinions of the author and trading not represent the recommendations of DailyForex or its employees.

Currency trading on margin involves high risk, and is not suitable for all investors. As a leveraged product losses are able to exceed initial deposits and capital is at risk. Before deciding to trade Forex or any other financial instrument you should carefully consider your investment objectives, level of experience, and risk appetite. We work hard to offer you valuable information about all of the brokers that we review.

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Is Forex Trading Allowed in Islam? Is Forex halal or haram? Forex Trading - Halal or Haram Fatwa Usury is of course completely trading in Islam, and is forex very widely. What Islam Says on Online Forex Trading Having reduced the issue to forex of trading spot Forex and assuming there is no interest element deemed to be involved, we move onto the next issue.

Creating a Muslim Forex Account There is no question that currency exchange is permissible in Islam, haram that there is no interest element, that it is made hand to hand though this phrase can be translated in multiple waysand that the exchanger has a valid reason to anticipate a probable profit based upon an analysis that does not rely upon the psychology of gambling.

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Is Currency Trading (Forex) Halal or Haram? Sheikh Imran Nazar Hosein 2011