Fatwa on Forex Trading, Forex Halal or Haram, A Complex Debate !
This is very controversial subject weather Forex Trading or online trading in General is legit in Islam or not. There are already lot of Fatwa on Forex Trading, Forex Halal or Haram so point to make in either discretion is quite confusing.
Saudi’s and Forex Trading – Reality Check
In General, Saudis are top in list when it comes to investing in Forex Trading in both middle east and Arab world. Saudis are the biggest retail and institutional clients for all Forex brokers exist in this world. In fact, more and more Saudis are coming toward online trading especially this time , when oil driven economy is trolling and people are looking for alternative
When it comes to online Forex Trading, people are often confused and relate it with currency trading only but most of the Regulated Forex brokers in Saudi Arabia provide most of the capital markets to trade, including Stocks, indices, CFD’s, commodities , Gold and oil trading.
As a Muslim, Jumping in a trade as rolling a dice without proper analysis and such could put you in a gambling situation. It’s a bit blurry so to say.
Forex consider to be Halal If :
- You’re honest to yourself, you know whether you’re trading or gambling.
- You are not gambling and have your end goals clearly distinguished.
- As a Forex trader you need to have a reason to take that action (sell or buy)
- You are doing proper analysis of the market and not just opting the gamble of trend or signal.
- You’re not trading for the sake of excitement but trade for the potential income and to make a living
- You’re taking it as a job and not the sake of excitement of getting money in term of fluke.
- You not thinking like this“if I win I win, if not next time”
- You learn from your losses and move on with the decision taken by yourself rather than blaming the market or blaming the situation
- You are trading on Islamic Trading Account or Shariah Compliant Forex Trading Account. In Islam, swap is Haram and same concept applied on Forex Trading. In other words, trading with Swap Free Online Forex Trading Account
Tips for Halal Forex trading
There is a thin line between trading and gambling, we all must admit it. But the good news is that you can avoid being a gambler.
- Only take trades with a high probability of making profit based on your analysis
- Exiting a trade is as just important as entering one, have a trade plan
- Define your stop levels
- Choose the right entry size, if you are risking all to double it its is called gambling
- Know what you are trading
- Understand the time frames, do not be addicted it is a sign of gambling
- Back test your strategy and aim to develop it
- Constantly review your historical performance and try to understand why you made loss and profit
- Be disciplined, trading is a job not a game
Please note that this article Fatwa on Forex or Forex is Halal or Haram is just a solely opinion and should not be considered as the opinion of all Saudi Arabia Forex Brokers. This article is not to justify , Forex Trading is Halal but their are some points, we need to focus before we could relate it to Islamic Forex brokers in Saudi Arabia.
To Conclude, the article, This is our intention which define the purpose of any act. Above tips and suggestions have been well researched to give concrete evidence if Forex Trading could be consider Halal or not. In our general life , as Muslim, we always make sure to be away from Haram and which is forbidden in Islam. Please don;t opt for Forex Trading while relaying on this article and always make sure to get opinion or Fatwa from any good Muslim scholar as well on Trading Forex online.