The Forex market is gaining popularity every day in all regions around the world. More and more people of the Muslim faith are acquiring trading skills and succeeding at Forex trading. As the interest in trading from Islamic regions increased, the Forex brokers began finding the solutions to provide the most Islam-friendly trading environment and conditions. There are few aspects that complicate trading in Forex within a regular environment for Islamic traders. Several factors actually go against the principles of Sharia law, including the accumulation of interest, which is a huge drawback for individual traders. Traders that use Islamic accounts are not able to receive or pay interest rates.
Islamic accounts are often referred to as swap-free accounts and they differ in several ways from the regular trading account. Besides the fact that Muslim traders can not receive interest rates, transactions made by them must be completed without delay, meaning that currencies that are transferred from one account to another should carry out immediately, and transaction costs must also be covered in no time.
In order to support Islamic Forex trading and promote the benefits of the Forex market, making it accessible to a global community, the best brokerage firms adopted Islamic account options. These accounts fully support and comply with the Sharia laws and make the trading conditions much more comfortable, convenient, and beneficial for Muslim traders. Mostly, the account types are equipped with special features, different types of fees, and applicable rates that do not go against Riba principles and ultra-fast execution of the trading orders. Despite the fact that numerous brokers will claim today that they are operating fully in support of Sharia laws, it is not recommended to simply believe the statement, but rather to double-check its legitimacy. For this purpose, we present you the article overviewing the best brokers in the Forex industry that support Islamic trading.
As we have already mentioned, Islamic traders do not find the regular trading environment acceptable and require different approaches, terms, and conditions for their trading. They need special administrative fees that will extract any interest or rollover fees associated with the trading as it goes against their religious laws. Since for the regular traders, rollover and swap fees are a common feature of the trading in Forex, the brokers need to create a separate account for Islamic traders only. You can find the list of the best Islamic Forex brokers below.
CySEC, FCA, ASIC
MT4, MT5, WebTrader
CySEC, CBI, FSA, FFAJ, BVI FSC, FSCA, FSRA
MT4, MT5, WebTrader, AvaTradeGO
Swedish FSA, Finansinspektionen
cTrader, MetaTrader 4, MetaTrader 5
SVGFSA, FCA, DFSA, FSCA, FSA
From 30% to 100%
Risk Warning: YOUR CAPITAL MIGHT BE AT RISK
FCA, CySEC, FSA
MT4, MT5, WebTerminal
ASIC, CySEC, FSA, BVI
WebTrader, MT4, TradingView
FCA, CySEC, DIFC, CIMA
WebTrader, MT4, MT5, IRESS
ASIC, SCB, CMA, CySEC, FCA, BaFin and DFSA
MT4, MT5, cTrader, TradingView
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Islamic Forex trading account is a special type of live trading account that shares most of the features with the regular accounts, however, avoids undesirable conditions that are considered haram by Islamic rules. There are basic principles within Sharia law that limit the behavior of Forex traders in the market. Therefore, these limitations produce below essential points that every Islamic account should satisfy in order to provide a legitimate and appropriate account for Islamic traders. Islamic account in Forex trading should come in compliance with all of the below-listed aspects:
Furthermore, the Islamic Forex account should have an access to the optimal trading platforms that process the orders with fast execution. Islamic traders will need seamless operations in their exchanges and it will be one of the most important factors that they will pay attention to, too. Some of the Islamic traders might also choose automatic trading robots if they do not have sufficient time to dedicate fully to trading and monitoring trades, therefore, it would be beneficial for them if the broker provides automated trading tools and platforms. Apart from the platforms, Muslim traders need a great diversity and room for choosing their desired trading asset, since not all financial assets (especially stocks) are allowed according to Sharia laws. The most popular financial instruments traded by Islamic clients are currency pairs which are fully compliant with their religious rules.
There are few things that distinguish a regular trading account from the Islamic one. If you are not a day trader, meaning that you do not open and close your trades within the same trading day then your trades should usually accumulate an overnight interest rate. First of all, day trading is a lot like gambling since in such a short period of time it is a highly risk-containing and complex thing to predict the market movement. Due to the gambling nature of day trading, most Islamic Forex brokers will prefer to avoid it at all. However, the accumulation of interest rates on overnight open positions also goes against the Riba principles of Sharia law. This overnight charge is often called a swap in trading glossaries.
For accounts in Islamic Forex, swap is not present, meaning that the brokers provide swap-free accounts without any interest fee paid or received from the traders’ side. Usually, these fees are included in the administration fees which are frequently asked to be paid on the Islamic trading accounts. Furthermore, the deducted fees might add up to the commission cost, however, it really depends on the Forex broker itself. Moreover, brokers will often provide the fastest executing trading terminals in order to support the urgency of the trades on Islamic accounts. Most of the brokers will offer the execution speed in a matter of seconds or milliseconds which is not a frequent feature in the standard and regular account types.
Generally, the brokers operate several types of accounts. Essentially, they have standard accounts and VIP accounts with the frequent addition of Micro or Cent accounts, professional accounts, or specific type accounts such as Cryptos. Many of these brokers will allow Muslim Forex traders to choose any of the account types and apply Islamic account options to them. In this way, all the account benefits and conditions will remain the same including the leverage, spreads, and margins, however, the rollover policy on overnight positions will be excluded from the account type. Similarly, the terminals, software, and trading platforms are also accessible for Islamic option-placed account types.
The clients of the Muslim faith can also choose a Shariah-compliant trading platform that will offer an enhanced execution type, most frequently the order execution type will be market and sometimes instant. In addition, Islamic accounts might come with extra benefits, such as additional market data analysis or technical analysis features. Usually, promotional programs are also available for Islamic Forex accounts. The most popular Islamic account campaigns include performance-based trading contests and sometimes Forex cashback. On the other hand, some of the account types might limit the Islamic account option because of their trading assets portfolio. For instance, most of the crypto-trading accounts are not Islamic account-friendly, as cryptos themselves are not as popular assets for Muslim traders as binaries or spot metals.
Opening a Forex Islamic account is a simple as registering a regular trading account. However, the procedure might vary from one broker to another. Usually, at first, the brokers will require that a trader goes through a general registration page. On the registration page, clients will need to fill up a form containing personal details fields. The customers should provide official and legit data about themselves since most of the brokers will require additional supporting documents issued by official institutions that prove the validity of the data. After registration, the clients should choose the live trading account type that they would like to operate with the broker.
For instance, registration on HotForex includes filling standard questionnaire – you need to fill out the information about your country of residence, phone number, email address, and other personal information.
Once you fill out this information, you will be sent an activation link to your personal email address. Once you verify it by clicking on the link, the second part of the questionnaire comes into play, where you have to indicate more specific information, including addresses, location, etc.
Later on, the website will ask the customer to upload personal documentation including proof of legal existence and proof of address. Once you do that, you are ready to fund your account and start your trading journey right away.
If there is no special, separate registration required for an Islamic Forex account, it means that clients simply register a live trading account and later request Islamic account options to be applicable to that account. Only Muslim customers have the right to request an Islamic account, therefore the proof of residence and nationality or any other similar requirement might come from the broker. The supporting documents list usually includes an Identification Document (ID), a Driver’s License, or an International Passport. Afterward, the traders will have access to Islamic trading platforms, trading assets, their trader’s profile, account balance, and so on.
Finding a suitable broker, let alone a convenient trading account type is not easy for any kind of trader. However, if the trader knows what he or she is looking for then it is much easier to encounter the right choice. When it comes to trading Forex for Muslim traders, it is absolutely advisable to go through the available Forex account types, trading conditions, and the benefits applicable to Islamic accounts.
Furthermore, Islamic account deposit requirements, swaps, administration fees, and commission rates should not be overlooked. If the broker charges unreasonably high administration fees or commissions, it is better to look for another option. Additionally, the trading platform of the brokerage firm should be advanced and highly reputable on the market, such as MetaTrader 4 or MetaTrader 5. It is also important to read the information regarding the speed and type of the order execution as it plays a significant role, especially in currency pair trading.
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