There is a clear difference between a Forex trader and a Forex gambler. Someone gambling in the Forex market is risking their hard-earned money and just hoping they will make profits.
The Forex trader is not doing that. The profitable trader is making trades with an edge over the market knowing that they will make profits.
Is Forex Trading Gambling in Islam?
Usury is the action or practice of lending money and charging interest in return.
This type of transaction is not permitted under Islamic Law. Any contract or deal that involves an element of interest or riba is not permissible.
Most standard Forex broking accounts charge you overnight interest fees. This is not acceptable under Islamic Law.
Most brokers these days do offer a type of Islamic trading account. These types of accounts do not charge any interest.
To maintain profit levels these types of accounts often have a higher commission or spread that is charged to the trader making the trade.
These types of Islamic accounts can be used to trade the markets and will take away any riba challenges involved with participating in the markets.
Forex Trading and Christianity
Trading the Forex market is creating and carrying out a business transaction.
Currency transactions are being carried out in every moment of the day all around the world. People are going on holidays and exchanging currency.
People are buying products from different countries and exchanging currencies. When you are trading in the Forex market you are exchanging currencies in a business deal.
There is a clear difference between using the markets to gamble, and using the markets to carry out business deals.
Some traders have an issue with making a profit whilst on the other end of the trade someone else loses.
In all walks of life there are winners and losers. Some kids will get accepted into certain schools. Some people will get the job they want and others will miss out. Someone will win at a sporting event and the other team or person will lose.
When trading the markets you are carrying out business transactions to create a profit and provide for yourself and your family.
However, keep in mind the markets should not be used to gamble as this creates an entirely different problem.
Forex vs Gambling
There is a very clear difference between trading the markets and gambling in the markets.
When gambling in the markets you have very limited knowledge and you have no idea if what you are doing will make money.
The gambler will continue to risk money as they lose even when they don’t know if they have a profitable trading strategy. This is completely different to what a profitable trader is doing in the markets and the key difference between a gambler and a trader.
Here is Why Forex is Not Gambling
A trader is completely different to a gambler.
The trader has a large knowledge base of both their trading strategies and also their money management methods.
This type of trader is not gambling away their money.
This trader is making trades when they know they have an edge over the market.
The edge over the market is the crucial difference.
When you have an edge over the market you are no longer gambling. You know that whilst you are going to have losing trades, what you are doing will work. You know that after taking into account all of your wins and losses your edge will make you money.
The gambler does not have that. The gambler is simply risking money ‘hoping’ they will make profits. This is a clear difference.
Without an edge over the market and a full knowledge of how to manage your trading money you are gambling.
When gambling in the markets it is just a matter of time before you blow your trading account.
Whilst you will make some profitable trades, in the end you will lose because you don’t have a proven system that will make you consistent profits.