Traders Tips
by Gerard on October 4, 2022

What are Islamic Forex trading accounts? Explained by experts

Foreign Exchange, FX or more commonly known Forex is the largest market in the world. The market is open 24/5 and it attracts more and more investors each year.

Trading Forex is also becoming more and more popular in the Middle East, among Muslim communities. However, Sharia law forbids lenders to make interest when they give out loans. Trading is a highly leveraged activity and most brokers make money on interest when they provide leverage to their clients. As a result, one question arises to every Muslim begginer trader, is Forex Halal or Haram? How do traders from Islamic countries manage to trade currency pairs without going against their religion?

In this guide, we will answer these questions and more. In addition, we will give you useful tips on how to choose the best Forex broker for opening an Islamic account. We will expand on Islamic Forex trading accounts and what to consider when choosing one for yourself. But first, let’s find out what is forbidden by

Main Islamic trading rules

  • It is not allowed to receive or pay any interest rate.
  • It is not allowed to gamble or do similar activities.
  • Risk and reward should have a certain distribution.
  • Only allows trading on the spot market

What are Halal and Haram?

Before we go any further, let’s discuss what these terms mean for Islamic traders, and what are the differences between them.

Halal describes any activity that is accepted by Sharia law. So whenever , this means that the trading doesn’t go against the rules of Islamic belief and Sharia law. On the other hand, Haram is an activity that is forbidden by Sharia law.

halal forex trading

Regulations on Islamic trading

There are many different Islamic trading rules and regulations that Islamic traders need to follow in order to avoid Haram. Among those restrictions, the most problematic for brokers is that they can’t charge their clients with interest.

Whenever a trader opens a position and leaves it open overnight, this position becomes subject to rollover interest. And as we have already mentioned, charging traders with interest is prohibited by Sharia law.

Lastly, one of the most common trading activities that are considered Haram is CFD trading. When trading Forex CFDs or futures contracts, traders don’t actually buy physical assets, and just make predictions on the future price movements. Consequently, , which is prohibited by Islamic trading rules.


How to make Forex trading Halal?

Since there are so many prohibiting laws when it comes to trading and also following Islamic law, how can we make forex trading halal?

To enable trading to traders that open their accounts from Muslim countries, many brokers offer swap free accounts. In other words, brokers do not charge the account holders with interests for keeping a position active overnight.

Gambling is prohibited. And Forex trading is not gambling when it’s done right. Many traders find their trading edge and trade consistently profitably. Make sure you have a good trading system in place and manage your risks and emotions properly before opening a live account to avoid gambling with your money.

Islamic Forex Account

Many Forex brokers offer Islamic accounts or Islamic versions of their regular accounts to their clients. Generally brokers let traders that are registaring from Muslim countries open Islamic accounts. And there’s more documentation needed than you would need to open a live account otherwise. Islamic accounts are also known as Swap Free accounts.

Moreover, there are dedicated and there are swap free versions of regular trading accounts. The difference between normal forex trading accounts and swap free trading accounts is that halal accounts have some sort of limitations placed on them in order to remove any possibility of acting against Sharia Law.

You will also come across brokers that only offer Islamic accounts or don’t offer such accounts at all. One might think that Islamic accounts are better in terms of trading fees since they are not charged with any swaps. However, it is not true. Brokers find other ways to charge swap free account holders. Usually swap free accounts have increased spreads and administrative fees.

Since Islamic accounts need to follow strict rules, there are many limitations placed on them. Generally Islamic accounts have less trading instruments for traders than regular accounts.

As you can see, swap free accounts have many limitations. It is recommended to only open a swap free account if you are religious and cannot trade otherwise.

Best Forex Brokers That Offer Islamic Accounts

As we have already mentioned before, there are many different brokers that offer Islamic accounts. The brokers offer swap free accounts in order to attract more traders from the Islamic parts of the world, where trading is becoming more and more common practice. But which brokers offer the best Islamic accounts in Forex? Let’s take a look at our Top 3 picks built via data:


pepperstone logo

One of the biggest and well-trusted brokers, and has managed to make a name for itself. With regulations from top regulatory bodies such as FCA, BaFin, and ASIC, it is one of the most trustworthy forex brokers in the market.

There are around 60 currency pairs available for trading on this broker’s platform. When it comes to spread, it has one of the lowest on the market, especially for major currencies. And on top of that, they offer zero-swap accounts, which follow Islamic trading rules.

What makes Pepperstone stand out from the rest is that it is also a social trading platform. This social trading platform is built in a way that Islamic traders can use it without breaking any Islamic trading rules. There are no extra fees and interest rates that might be considered haram.

And lastly, Pepperstone provides a fantastic selection of educational material that includes ebooks, seminars, webinars, video guides, economic calendar and many other tools for research. Novice traders need good support to deepen their knowledge of the FX market and make their path into the world of financial trading.


xm logo

Another front-runner in the financial markets, . What makes XM stand out from the rest is their relatively low fees when it comes to standard forex trading accounts and their rich educational materials, that will help any trader learn anything that they will need when it comes to trading with XM.

Security is another important feature of XM. It holds regulatory licenses from countries such as Australia, Cyprus, and some other international licenses. It also has a good selection of payment methods, and it is unlikely that you will not be able to find a payment method suited for you.

When it comes to Islamic trading platforms, XM offers 4 types of Islamic accounts. They have Micro, Standard, Ultra Low, and Shares swap-free accounts available on their website. Each of these accounts is fitted for different styles of trading, so traders have a good selection of account types, and can choose them based on their expertise and goals.

FP Markets

fp markets logo

Last but not least, famous for low fees and good services. They offer more than 60 assets with no commission associated with them. Traders are also given an option to use an ECN account that allows transactions from as low as 0 pips, but when using this account, traders will have to pay some commissions.

Just like the previous two brokers, FP Market also has good security and regulatory status. It is regulated by ASIC and CySEC which even further strengthens its legitimacy and status.

When it comes to Islamic trading accounts, FP Markets offers few options, each suited for different types of traders. What makes FP Market an interesting broker for Islamic traders is its Islamic Demo Trading Account. Islamic traders on FP Markets are able to use demo versions of their accounts in order to test out their skills and strategies in a real-life market using trial funds.

And lastly, FP Market does not charge the most common fees. Fees such as deposits, withdrawals, or inactivity fees are not present on this broker’s website.

FAQs on Islamic Accounts In Forex Trading

Forex halal or haram?

This is a question that splits opinions into two sides. Most people believe that with the help of Islamic trading apps, Forex trading has become halal and Islamic people can freely trade on the market. While there is a second side to this debate, that believes that these Islamic accounts still don’t fully follow the Islamic laws, thus making forex trading haram.

Is Forex Leverage halal?

In general, no. Leverage is the process of borrowing money from a broker to increase your purchasing power and profits. But brokers usually charge some sort of interest rate during this process, which makes this haram. But there are also brokers who don’t charge any interest rates on leverage, which means that even Islamic traders can use this feature.

By Gerard

Gerard contributes his 10 years of experience to the Forex Trading Bonus team by reviewing different brokers, outlining regulation, and reporting on the most important news in the industry. His brief stint in the Bank of England gives him the edge over many other writers to deeply analyze a policy change and come up with a distinct result that could come from it.

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