Forextrading the Islaamic way
Managed Forex Accounts are fully segregated accounts individually owned by each investor at a brokerage firm, but managed (traded) by a professional trader on their behalf. Investors have full control over and access to their accounts\funds at all times, as their money managers are granted “trade only” access to the accounts.
What is an Islamic Forex account?
According to Islamic law, or Shariah law, Muslims are prohibited from earning interest on their giving. This law, when applied literally, also applies to interest earned on Forex trading. To address this issue and to make it possible for Muslims to trade Forex according to Islamic law, many Forex brokers opened the opportunity for Islamic Forex accounts which offer interest-free Forex trading (aka No Riba Forex).
Islamic interest - free accounts allow traders to trade any currency pair, but despite the volume of a trade, which is carried over midnight, do not suppose any reward or withdrawal. The accounts, which do not have the swap influence, give its owners an opportunity to keep the positions opened during an indefinite long period and do not provide any negative or positive commission for the rollover. In this case, the result of trading depends only on currency rate's movement for that certain period.
“Gharar” is an Islamic finance term describing a risky or hazardous sale, where details concerning the sale item are unknown or uncertain. Gharar is generally prohibited under Islam, which explicitly forbids trades that are considered to have excessive risk due to uncertainty.
Whereas the first term, “Riba”, is commonly understood, it is the second term that puts the heaviest restrictions on how an Islamic follower must act within today’s volatile currency markets. “Gharar” is typically found in all derivative contracts, and, for this reason, Muslims are forbidden from trading in forwards, futures, options, short selling, or speculation in general where the future delivery value of an underlying asset is in doubt or uncertain. Trading on the “spot” market, however, is considered within the rules, according to most Islamic jurists..
Muslims are also prohibited from gambling and speculating. Our every trade is placed only after in depth technical and fundamental analysis. We trade and not gamble the markets.
*Past performances do not guarantee future results. Please understand that when trading forex you may experience losses as well as gains. Refer below to our Legal Disclosure if you are not fully aware of the risks.