Islamic FOREX is buying and selling currencies online, in a Halal way, in accordance with Sharia principles. That is why Islamic FOREX is sometimes called Halal FOREX.
Islamic FOREX is not the same as physical FOREX, where one currency is physically exchanged for another currency, usually for the purpose of transferring money for business or social needs, like holidays. The vast majority of Islamic Rulings on Money Exchange (Sarf), applies to this physical exchange of Money. The rulings ensure that Riba (Interest) is not involved and no cheating takes place through such requirements as Hand-to-Hand transaction, Exchange in the same sitting and taking physical delivery of the currencies.
Islamic FOREX is different as no physical or real money is exchanged and no delivery is taken of physical money. Instead currencies are traded ONLINE with the sole intention of making a profit from the difference in Exchange Rates of a currency pair. Thus the purpose and intention of the trade has changed compared to Physical FOREX.
We at Islamic FOREX believe that Online Islamic FOREX Trading is NOT the same as Physical Money Exchange, thus not all of the Islamic rulings of Sarf should apply.
The Quran states that “Allah has allowed trading and has forbidden usury” (2:275).
Thus, as long as Riba is not involved in ONLINE Trading, there is no reason why online trading should not be Halal.
However, there are still many other Sharia Business Principles that still need to be adhered to in addition to removing Riba in order to make Islamic FOREX, well, more Islamic.
Islamic FOREX embarked on a journey over 12 years ago with the intention of finding a way to make Financial Trading as Islamic as possible in 3 Phases as described below.
Phase One – Define Islamic Trading, in particular, Islamic FOREX Trading.
We have analysed all the issue pertaining to why Trading and FOREX are not Sharia Compliant. We then worked towards solving these issues.
In the absence of any formal definition of what Islamic FOREX is from any individual Ulama \ Scholar, Ulama Group or other Islamic Organisations, financial or otherwise, we at Islamic FOREX, have taken the bold move to publicly define what Islamic FOREX is. We have set a very high standard to meet.
Islamic FOREX can be defined and recognised through 13 features as follows:
- Trading with an Islamic Account to completely remove Interest (riba)
- Removing Gambling (maysir)
- Reducing Guessing & Uncertainty (gharar) .
- Managing Greed.
- Minimising Speculation.
- Providing Trade Tracking with Trade Verification – this removes gambling & uncertainty.
- Risk Tracking with comprehensive Risk Management – removes gambling.
- Loss Tracking & Loss Management – protects the Traders Capital.
- Applying a Muslim Traders Psychology.
- Integrating a Muslim Traders Lifestyle.
- Using a Shariah Compliant Trading System – Bounce Action and the MATHS Trading System.
- Traded by qualified & experienced Traders – Bounce Action Certified Traders.
- Using an Islamic Brokerage Service – provides Halal solution for intrinsic Sharia issue such as Leverage & Ownership of Assets, along with a new type of Islamic Trading Account exclusively for Muslims!
We expect criticisms to come from many people and groups from the Ummah, but that’s what we Muslims are good at, criticising. Everyone is happy to criticize and find faults, yet no one is able to offer any solutions!
How do we know? we have been hearing the same arguments against FOREX for years, but no one has offered any suggestions on how to overcome these restriction and problems.
Pushing FOREX as Haram has also been the status quo for FOREX for over a decade now – FOREX is Haram, stay away is the message everyone gives.
Finally, Islamic FOREX is here. We are going to make FOREX as Halal as possible through Islamic FOREX, so that millions of people in our Ummah can benefit from Online Halal FOREX Trading.
We have been working on solving the Islamic Financial Trading problem for over 12 years. We have taken the first steps to define Islamic FOREX, setting a very high standard to meet indeed. Next came the problem of meeting the high standards we set for ourselves. Welcome to Phase two!
Phase 2 – To create a New Islamic Trading System from scratch!
Phase 2 was to create a completely new Islamic Trading System from scratch, intrinsically integrating Islamic Principles into its foundation. This is the only way to solve the Shariah Compliancy issues and meet the high standards we have set for ourselves.
To create a new Islamic Trading System would require a completely new way of trading, since the current ways of Trading cannot meet the criteria for Islamic FOREX, i.e. Shariah Compliancy. The New Islamic Trading System must not be a copy of any other trading system in existence. It must be easy to learn and easy to apply under pressure. It must be able to deal with different market conditions and adopt to changes in the trading day. It’s Risk Management must be on par, or beyond what is available in current trading systems. And the list goes on, and on, and on. Clearly, this was sounding like an impossible task.
To find a new way to trade would require a New “Trading Engine”. So what is a Trading Engine? A Trading Engine provides a Trader with a way to analyse the market movements and then make an informed decision to determine the next market movement.
Creating a new Islamic Trading Engine is a mammoth task! No one knows what this looks like and how it will work or how it will find trades. No one in the world has created a new “Trading Engine” for nearly a hundred year!
The current Price Action “Trading Engine” was invented by a Japanese Rice Trader called Munihisa Homma around 1755. He was also the inventor of Candlestick Charts as we know it today. The vast majority of Trading today is analysed using Price Action.
The most recent Trading Engine, that uses repeating patterns of Waves to analyse the market, was developed by Ralph Nelson Elliott, known as Elliott Wave Principle or Elliott Waves in 1930, nearly a 100 years ago!
In the history of Islam, there is no known Financial Trading Engine or Trading System developed by anyone, ever, until now. The scale of our achievement is unrecognised by the Muslim world!
We would like to present to everyone “Bounce Action”, the world first and only Shariah Compliant Trading Engine and the MATHS Trading System, a 100% Shariah Compliant Islamic Trading System.
Bounce Action took 12 years to develop. It is an Islamic Trading Framework that provided a new way to analyse the market. It verifies each trade and manages Risk & Loss. The MATHS Trading System sits on top of Bounce Action to provide the Trade Setups and Trading Rules.
Bounce Action with the MATHS Trading System fulfils the majority of the 13 requirements for Islamic FOREX. However, a Trading System alone can not solve the other Shariah Compliancy issue such as Leverage and Ownership of Assets. Welcome to Phase 3, where we intend to overcome and solve the final hurdles to make Islamic FOREX 100% Shariah Compliant.
Phase 3 – The Islamic Brokerage Service
This is our final phase to make Islamic FOREX Halal. This is where we are right now.
In order to make Islamic FOREX 100% Shariah Compliant, it is required that all transaction go through an Islamic Brokerage Service.
We need to be in control of our own brokerage services so that we can change aspects of the service that may not be conforming to Shariah requirements.
We already have a completely new architecture for an Islamic Brokerage in place that will deal with the issues of Leverage, Two Transactions-in-One and Ownership of Assets. We are also going to introduce a completely new type of FOREX Account exclusively for Muslims that is 100% Shariah Compliant In’Shaa’Allah.
If anyone wishes to get involved with the launch of the worlds first Islamic Brokerage Service, please get in touch with us.
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