To cater to a growing clientele of Muslims in forex trading, the No Riba or Islamic forex accounts was created. The principal belief of Muslims in financial speculation is that the concept of interest is bad and should be avoided at all costs. Muslims, by faith, cannot earn interest on their deposits. Investors can trade in forex, but not earn interest in their opening accounts.
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Roll over fees
The policy of faithful Muslims is to avoid receiving or paying interest in any kind of economic activity. The interest charged in a usual forex account is known as SWAP or roll over fees and they can vary from one forex broker to another. As a Muslim, anyone can opt for an Islamic forex account in keeping with the person’s faith. Muslim forex traders are not charged interest on their opening accounts to avoid non Muslims from feeling discriminated against.
The reason why non Muslims feel they are not being fairly treated is that Muslims can keep their open accounts for a long period without any interest. This is one of the downsides of a Muslim forex account. Many people also misuse the facility by maintaining two accounts, one Islamic and a normal account. They take a short position on an Islamic account and go for a longer position on a non Islamic account. The profit in one account gets cancelled by the other.
Many Muslim forex accounts are called Sharia accounts as well with free options for getting more Muslim clients. Many traders using both accounts can offset the loss on one with the profit earned from another. This system is also known as carry trades and is not allowed by many forex brokers who want to stick to a fair rule for everybody. Many professional brokers do allow traders to maintain both accounts in keeping with the growing demand.
Total compliance with Sharia laws
You can find accounts with forex brokers that are in full compliance with Sharia laws and you can open a real money trading account. With the forex brokers, you can also get to practice at their demo account which is a great way to master the technical and fundamentals. Once you sign up, you can request the broking firm for a swap free account which is easily downloadable. You can send them back after signing to the broking firm where you have your Islamic forex account.
Usually, all broking firms have a set rule about the swap account. As soon as they receive your request after you send the filled out and signed form, the accounts department of the forex broking firm will file it according to Islamic accounts guidelines. The policy to be followed by the firm will automatically be swap free.
But the brokers will always verify whether you have submitted the right evidences for maintaining the account and also if there is any complaint, they can ask you to close the account with them. Once you get your Islamic forex accounting systems done, you will begin to enjoy the same features of the Metatrader platform that is available to others for availing the forex sign up bonuses.
You can also enjoy the leveraging facilities and the options trading that are enjoyed by others. These are common advantages that forex traders with a Sharia account can also enjoy. You can trade in more than 70 currencies, futures and CFD’s. Like others, Islamic forex account holders will be assigned a forex account manager and you will be entitled to 24/7 support and service for making money in the very high volume speculative of all trades.