How to work and the law according to Islam

Currently, stocks have become a lifestyle preferred by many people, especially young people. The reason is that this can bring huge profits. So, if you want to trade Forex safely, just use Shariah compliant Forex.

What is this? Therefore, trading in foreign currencies or foreign currencies is done on Islamic foundations and principles. This type of Forex has appeared recently and has been widely traded by experts in the Forex field. Let us discuss in more depth about online forex trading here.

How does Forex based on Islamic law work?

Forex is an abbreviation for foreign exchange or foreign currency transactions. This transaction is carried out by two countries, both of which sell foreign currencies to each other. At the same time, Forex traders carry out buy and sell transactions privately.

Therefore, if traditional Forex brings a lot of losses, Shariah Forex is a foreign exchange transaction that uses Islamic principles in carrying out these transactions. Therefore, the Hadith and the Qur’an are the reference for all transaction processes.

If traditional Forex applies an interest system, Forex based on Islamic principles does not specify any interest on transactions. Apart from that, this type of Forex also rejects gambling, multiple transactions, fraud, manipulative actions, and unclear information.

Therefore, this is considered more profitable for traders. Therefore, traders who want to make safe buying and selling of Forex can use this type of Forex so that security can be ensured while executing Forex transactions.

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This is Forex law with Islamic principles

Forex is legal and can be done in many Muslim majority countries. Meanwhile, Indonesia also allows this type of forex trading. This has also been determined by the Indonesian Ulema Council.

MUI allows foreign exchange trading based on Islamic principles in accordance with Fatwa No. 28/DSN-MUI/III/2002. The fatwa clarifies the permissibility of buying and selling foreign currencies, also known as “honour”.

Why? The reason is that it is done in accordance with Islamic principles and all transactions are carried out in a trustworthy and honest manner. However, Indonesia applies the following four rules to carry out Sharia-based forex buying and selling.

  • The process of publishing Shariah bonds must be transparent.
  • Sharia shares and investment funds were issued.
  • Impact of backed assets
  • Applying various principles of Islamic Sharia in all transactions in the financial market.

Meanwhile, MUI also allows forex trading as long as it applies SPOT. What is this? Therefore, SPOT is a currency conversion transaction with a maximum of 48 hours (2 days) after the buyer and seller agree on the buy and sell transaction.

What are the benefits of buying and selling Shariah Forex?

If you use Sharia-based Forex trading transactions, you will get the following benefits.

  • Interest or usury is avoided because all Sharia-based foreign exchange buying and selling is done in accordance with Islamic principles that do not allow interest.
  • Since there is no interest at all, traders also do not need to pay any interest fees when making transactions there. This will certainly not burden the traders, so the profits generated from buying and selling will also be higher because no interest is charged.
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At the same time, Sharia-based Forex also has significant differences from traditional Forex. These differences mean that Sharia-based Forex can have advantages over traditional Forex.

  • Forex, which is based on Islamic Sharia principles, is implemented through comprehensive market analysis and calculations. The reason is that it uses Islamic principles, and all buying and selling there must be of clear value and origin in order not to be considered usury.
  • Shariah-based Forex uses a swap-free or interest-free system. This is the same as what we explained above.
  • Apart from that, this type of Forex also does not apply any overnight fees. It is a Forex buying and selling system that uses no fees in all transactions carried out. The absence of additional costs is one of the principles of Islam.

Shariah compliant forex trading app that novice traders can try

If you are interested in carrying out foreign currency buying and selling transactions according to Islamic law, we provide several recommendations for the best applications for carrying out forex buying and selling transactions using Islamic principles. Don’t worry, all of the following apps are officially licensed and are commonly used by professional traders.

Apart from that, these apps are also easy to use so that even beginners can use them without any confusion.

1. FPS

This application has been present in Indonesia since 2011. This application is a Forex service that provides the buying and selling of foreign currencies that are compatible with Islamic law. Since most of Indonesia’s population is Muslim, this is of course welcome.

However, the buying and selling done on this app is legitimate gold buying and selling. There is also a swap-free system as we discussed above. This means no interest on all transactions there.

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Not only that, this app is also very suitable for beginners as there are various educational information related to Forex in this app. This will definitely make it easier for people who are just starting to buy and sell forex.

2. OctaFX

Another app you can try is OctaFX. This is one of the widely recommended Sharia-based Forex apps because it is easy to use and can provide many benefits.

This app, which originates from Russia, is also popular among global traders, and not just in Indonesia. This service does not use the interest system. Not only this, but the spreads charged are also very low so that traders can make more profits.

3. InstaForex

This application has official permission from FFMS or financial body of Russia. This application focuses on providing halal forex transaction services to all Muslims in the world.

Therefore, this application is directly supervised by the Russian Financial Agency. Apart from that, this app also has a high level of security. With these various advantages, it is not surprising that InstaForex is admired by many Muslim traders from different countries.

4. XM

This app is really dedicated to buying and selling Forex according to Islamic law, so it is specially marketed in Islamic countries like Indonesia. However, you have to make a strict selection to be able to use this application.

Therefore, it can only be used by Muslim traders who have passed the selection and verification process. There are many premium features such as free swap if you have received this verification.

how? Do you understand Sharia law in Forex? Now, you just need to learn more about Forex so that you can get high profits when buying and selling Forex.

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