Halal Or Haram? This is the Law of Forex Trading According to Islam

Question “Trading forex is halal or haram?” is one of the questions that society has never finished debating. Before you dive into the debate any further, it’s a good idea to read the facts below! How to trade forex according to Islam? Let’s see!

Understanding Forex Trading

Before explaining how to trade forex according to Islam, we must first understand the meaning of forex trading itself. Forex stands for Foreign exchange. Basically, forex is foreign exchange.

Foreign exchange (forex) is the exchange of one country’s currency value with another. In forex trading, a trader exchanges the currency of one country for the currency of another. The difference from the exchange rate of the currency is what is an advantage for the trader.

Forex Trading Is Not Gambling

The assumption that forex trading is gambling has indeed mushroomed in the community. On the internet or social media we can also easily find articles or posts that say that forex trading is gambling.

You need to know, this is a myth and assumption that is not true. Gambling and trading are two different activities. Trading does not only rely on guesswork or speculation, but relies on careful analysis and calculations.

If a trader has the knowledge and does the analysis, then he will potentially continue to profit. Forex trading can be said to be gambling if a trader only relies on guesswork without good knowledge and analysis.

In addition, forex trading is regulated by Law No. 10 of 2011 which was previously Law No. 32 of 1997 concerning Commodity Futures Trading. In other words, trading is legal and has a legal basis. In contrast to gambling which is prohibited by law.

Forex

Forex Trading Not Riba

In the book Masail Fiqhiyah written by a fiqh expert named Prof. Drs. Masjfuk Zuhdi, stated that forex trading is allowed in Islamic law. Forex trading is considered halal because the products traded have a clear value, namely foreign currency.

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Forex trading is not usury, but purely trading the value of currencies according to their values. Meanwhile, usury is a transaction of lending money and must provide more value than the amount lent, or in other words must provide interest.

Well, those are some discussions about forex trading according to Islam which of course can straighten out stereotypes about forex trading that may have spread among the public.

Many ordinary people immediately assume that Forex trading activities are illegal because they are equated with gambling.

This is based on the reason that a trader or player will invest in a certain type of currency. Then, the trader waits for the price to rise and fall.

You just need to sit quietly at home without having to work hard, move, or even go to the office but you can easily earn money until you become a billionaire. This is what makes people think for themselves that forex trading is illegal.

In fact, you need to know that actually the basic principle of foreign exchange or Forex is purely trading.

More specifically, forex trading is a business of exchanging foreign currencies. For example, Rupiah to Euro, Rupiah to USD, or so on.

Later, the abundant profits can be obtained from the difference in exchange, depending on market conditions. While gambling, all player decisions are taken by predicting or guessing and depending on luck or hockey.

This is clearly different from trading. Even though trading can be done by sitting quietly at home, our minds are still working optimally.

Maximum and mature decision making is needed when trading. In addition, the decisions taken also need to consider fundamental, technical analysis, a little natural intuition, and other special strategies.

So, ordinary people or laymen who do not have sufficient knowledge or skills cannot trade forex before learning forex first.

Halal Atau Haram? Ini Hukum Trading Forex Menurut Islam

Forex Trading Laws According to Islam

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A sale and purchase transaction of any kind, including foreign exchange, is permitted if the goods being traded are not illegal goods.

In addition, there is no element of cheating, hiding defects, and does not contain gambling or speculative elements.

What is meant by speculative is like guessing the price. If you are lucky, you will get good stuff. However, if you are not lucky, you will get a bad item.

If you are one of the parties who think that forex trading is haram, including gambling, usury, and so on, then you are advised to seek more in-depth information.

Why is that? Because the investment has been officially proven and even recognized by Islam that the investment is 100% halal.

This is stated by evidence of the issuance of the fatwa of the Indonesian Ulema Council (MUI) to be precise in the Fatwa of the National Sharia Council Number 28/DSN-MUI/III/2002 concerning currency trading or what is called Al-Sharf.

MUI stipulates that foreign exchange (forex) transactions are permitted because the origin of the income is very clear. The huge sums of money earned by traders are not the result of betting on an international scale, but are regulated globally.

Even traders or sellers and buyers know the flow of transactions, the amount of funds, and other information. Even when the transaction does not have the form of the goods because it is done online, however, there is certainty regarding the nominal, time, and so on.

Thus, the sale and purchase of foreign currency is still considered valid even though it is carried out indirectly. Of course, as a trader, you are not harmed at all and there is no cheating. Why is that? Because everything is transparent or can be monitored directly.

The exception is if the money from forex trading is not given to the owner so that it can be said to be illegal or fraudulent. You also don’t need to worry because every player can find out all the forecasts or price movements of each type of foreign currency.

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Therefore, from the statement above, it is clear about the law of halal or haram forex trading according to the Islamic religion. That way, you don’t have to worry because this transaction and short-term investment is safe to do.

However, for information, even though buying and selling foreign exchange in the cash market is legally permissible, for online foreign exchange transactions, the law is detailed. The following is the law of online forex trading.

Forex trading is declared unlawful if the price does not match when the buyer decides to make a transaction with the time the transaction is accepted by the seller (broker).
Halal or permitted if the price at the time of purchase is the same as when the transaction is received by the seller (broker).

Basically, forex trading in Islam is allowed because it has been explained by the fatwa of the Indonesian Ulema Council (MUI), to be precise in the Fatwa of the National Syari’ah Council Number 28/DSN-MUI/III/2002 concerning currency trading or Al-Sharf. So it can be concluded that forex trading:

It is not illegal because it is not trading in unclean/unclean goods.
It is not illegal because it trades the value of currency.
Not gambling or speculation.
Not usury.
It is not illegal because it is used for investment or just in case.
Profit from Forex Trading

After knowing about forex trading and how the law of forex trading is according to Islam, now you are more familiar with forex trading and know the law in Islam, which is halal.

That way, you don’t need to be afraid or hesitant to trade forex for fear of being illegal. Now you can start trading forex and have the opportunity to make fantastic profits.

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