Forex trading, also known as FX and foreign exchange trading, is the buying and selling of different currencies in order to take advantage of their fluctuations in value. This market was once completely dominated by banks and other multinational financial institutions, but the internet has changed the way the forex market works.
Gone are the days when data was transmitted by phone and cable to share the latest news on trading pairs between Europe and the United States. Now, the exact value of each currency can be identified at any time by anyone with internet access, and the entire market is a complex web of banking software moving digital money around the world.
This has moved foreign exchange trading from a specialized market only accessible to banks and financiers to an open market offering individuals the opportunity to earn money. The foreign exchange market is not centralized, which means that each country is responsible for developing and applying its own laws and regulations.
This means there are fewer third parties and brokers involved, allowing individuals to trade with minimal fees, costs and commissions to pay. The market is also fast and liquid, ideal for anyone who might be interested in trading but cannot commit to it full time.
The global phenomenon of forex trading
There are specific centers for forex trading, including London, Hong Kong, Tokyo, and New York. However, traders can operate from anywhere in the world, as long as they have an internet connection.
Forex traders typically use an online broker to manage their sales and purchases and alert them to any significant movement in currency values. Traders can choose the type of account that suits them best and automate as much or as little of the process as they wish.
The forex market is open 24 hours a day, Monday through Friday, making it ideal for anyone who wants to trade markets in different time zones. It also means you can have the weekend off, although most traders will still follow the news and stay alert to anything that could affect currency performance.
Traders can operate in any market they choose, buying and selling currency pairs wherever they think there is money to be made. However, there are religious issues with forex trading with specific trading accounts designed to accommodate them.
What is a swap-free account?
Forex relies on buying and selling, usually high volume, to make the most of small changes in value between currency pairs. However, this can cause problems for Muslim traders who are not allowed by their religion to make money through usury or gambling, and forex trading could be considered a cross between the two.
If a trader buys a currency that has a higher interest rate than the currency they are selling, they will earn interest which is usually paid through their broker and can range from a few dollars to thousands over the course of a day. only one night. If one currency has a higher interest rate at the time it is sold than the other currency in the pair, the trader will deduct the difference from the value of the trade.
Many Muslim scholars believe that the “non-exchange” trade in currencies avoids items that are “haram” or prohibited. “Swap” is the commission paid for holding a position overnight, and this is widely considered a form of interest.
Swap-free accounts offer Muslim investors a commission-free way to hold positions overnight, without paying or receiving the “swap”. By settling trades on a “no trade” basis, the attrition element is virtually eliminated, so these accounts are used by those who wish to maintain their religious standards while trading.
Blackbull Markets offers trading of Islamic accounts to all investors who wish to take advantage of these swap-free accounts and take advantage of the opportunities offered by the foreign exchange market. However, these accounts are not just for Muslim investors as they can provide benefits to other forex speculators.
Because swap-free accounts earn money solely on the basis of currency exchange, with no interest paid, it also removes the gambling element that is usually associated with trading. Gambling is also prohibited by Islamic law, but there are other religious sects that have a low opinion of gambling, and a swap-free account is the perfect way to accommodate such restrictions.
Whatever your situation, you can find a forex trading account to suit you, whether it allows you to be hands-on with your trades or a fully automated setup that allows you to anticipate market changes and set trades. Consequently.