Many Muslim traders hesitate to start holding longterm positions due to the fact that all orders carried overnight on Forex are subjected to either earning or paying interest. Interest is arguably the most Haram aspect of financial transactions, including banking, mortgage, credit cards and also currency trading. One way to make your experience at the currency exchange market Halal is by choosing to work with one of the Islamic Forex brokers. Today we are going to take a closer look at what is an Islamic Forex trading account and how can Halal trading be achieved in the conditions of the modern market.

Since we have already established that swap is essentially interest charged for the positions that are being held overnight, Islamic account Forex trading is the one where the swap charges were dropped. In other words, we are looking for a Halal Forex broker who allows to carry the positions overnight completely swap free. You might very rightfully point out that the broker still needs a source of income to be able to process trades for their clients, however dropping the swap fees does not necessarily mean that there will be no charges associated with the Halal trading. The main difference is going to be that the fixed fee paid to the broker will not be considered interest and will be charged only once per the chosen period of time rather than each night.

For the trader it will mean two things: ensuring that their currency trading process is Halal as well as being able to know what to expect and how much to pay in service charges. To see the difference, imagine holding a position open with the swap charges included. The way this happens is the position gets closed and then immediately reopened to live another day. The closure and the reopening happen at the current market price. In some cases the reopening can be quite profitable, but in others it will actually cause minor to medium setbacks to the trading account. That way with the swap free trading you are both trading in compliance with Sharia Law and protect your capital from unexpected overnight changes in the market.

As you can see a Halal Forex trading account opening is entirely possible as long as you choose the right broker to be with. Additionally, a Halal broker will allow you to take some time and get to know the specifics of trading on the Islamic Forex trading platform through free practice. Free Forex trading demo account is a great opportunity to get to know the platform you are using as well as see Halal trading process in action. Open your Forex islamic account today to explore the opportunities of Islamic trading and start earning income in a completely Halal way.