Islamic Forex Account | Best Islamic Forex Brokers List

What is an Islamic forex account for trading?

Simply put, an Islamic Forex account allows Muslim traders to trade overnight without interest rate commissions.It can be offered by nearly all Forex brokers.

This page explains why you need this account and how it works.

Islamic interest restrictions It is forbidden to charge interest if you borrow money from a bank or pawnbroker.

This is due to Islam's devotional nature. It is important that people don't place too much emphasis on the benefits of charitable activities. It is against the law to have any interest in any service.

Muslim traders are not permitted to trade overnight.

This directly translates into Forex trading.

If you trade on a short term basis, you won't be charged interest rates. Because individual currency interest rates change daily, this is why you won't have to pay any interest rate charges.

If you trade overnight, and you have trades open for longer than one day, the broker will be responsible for the difference. If your currency's rate of interest is lower than the one for which you are purchasing it, then you will have to pay the swap.

It seems reasonable to assume that Muslim traders will not be permitted to trade Forex overnight.

Islamic account for trading How does an Islamic forex account work? Most Islamic accounts are very similar to live trading accounts.

It is likely to have the same leverage, spread and minimum deposit requirements as its parallel accounts. Similar results can also be expected for order types, execution policies, and other factors.

Swap commissions are what make the difference.

An Islamic forex account might have a different setup. To be eligible for a swap-free account, you might need to provide documentation or other proof of your Muslim faith.

To offset the absence of swap charges, Islamic trading accounts might have slightly higher commission rates.

The Islamic account can be used for overnight trading. You must be eligible to open an Islamic account.