Why forex trading is haram


why forex trading is haram

issue of Islamic Forex at length, we do not intend this article to replace. 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. Forex is Gambling and Gabling is Haram in Islam. So the exchange must take place in the same sitting, hand to hand, if the currencies are different. But if they are of the same kind, two conditions must be met: they should be of equal amounts and the exchange should take place in the same sitting, because the Prophet (peace and blessings of Allaah be upon him) said: Gold for gold, silver. Back test your strategy and aim to develop it 8-, constantly review your historical performance and try to understand why you made loss and profit 9-, be disciplined, trading is a job not a game 10- Focus 11- Trade with an Islamic account providing Forex. On the simplest level, one could argue that using fundamental analysis is allowed but using technical (chart-based) analysis is not. The evidence for that is the report narrated by Ubaadah ibn al-Saamit (may Allaah be pleased with him) who said: The Messenger of Allaah (peace and blessings of Allaah be upon him) said: Gold for gold, silver for silver, wheat for wheat, barley for barley. This implies that any kind of deal or contract which involves an element of interest (riba) is not permissible according to Islamic law. But the restriction of riba may be overcome when no overnight interest is charged or paid, such as in a regular spot Forex trade. This article is, in no way or form, intended to serve as a religious ruling.

It is here that we arrive at the biggest hurdle in attempting to answer the question Is Forex halal or haram? Not trade for the sake of excitement but trade for the potential income and to make a living 4-, not to approach it as a game but as a job 5-, have a mindset to win or to protect your equity rather than telling yourself. There is no actual buying or selling or owning of the currency. And Allaah is the source of strength. However, according to Islamic law clearly prohibits gambling. But if there is a delay, then it is not permissible, and if the exchange is not done in the same sitting, it is not permissible, because in that case it is regarded as a kind of riba-based transaction. Based on our findings, it would seem that as long as there is no question of riba, the trade is made hand to hand (the exact definition of this phrase is still open to interpretation for many Muslims and the person doing the exchange has. 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. On a minimal basis, Islamic Forex brokers can be used to trade, which should at least remove arguably all of the riba challenges. 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. These brokers maintain profitability by increasing their commission on spot Forex trades, so they can recover the losses of not having commission on other positions.

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