What is Forex trading?
Forex, also known as currency and foreign exchange market, is where currencies are traded. Currencies are important to people around the world.
Currencies are necessary for exchange in order to conduct foreign trade. It is the largest and most liquid market in the world. It suits different markets in measure even the stock trading system with a normal exchanged valuation of approx.
It is a global decentralized marketplace for the exchange of monetary forms. This market solves distance trading. The main members of this market are the larger universal banks. There is a wide range of multiple types of buyers and sellers in this market.
The Forex trading market is unique due to the following characteristics:
Huge exchange volume, talking about the largest resource class on the planet, causing high liquidity;. Continuous duty, 24 hours a day except weekends;
• Geographic dispersion;
• Continuous work, 24 hours a day without Saturdays and Sundays;
• A variety of factors that affect exchange rates;
• Low profit margins compared to other markets;
• Using leverage to increase profit and loss margins.
The forex market is called a market closet to the ideal of perfect competition.
With such a huge number of experts that are irrevocable in the Forex exchange, there are several dangers associated with it that one needs to consider.
One should make sure that their internet connection and computer are running very smoothly all the time. We all know that things happen, servers go down and our computers freeze or shut down depending on the activities going on. This can affect transactions, so be aware that things can happen during trading.
There are also risk-free accounts that allow you to practice without losing your own money.
The forex trading market is always on 24 hours a day, 7 days a week. No matter your time, location, internet connection and computer, you can log in at any time to ease me to trade.
It is scalable. With this feature, the trader can control and limit the risk depending on his account.
Leverage is a huge advantage in the Forex trading market, where brokers allow you to trade up to 2% of the total contract size compared to the stock market. One can use a small account for trading large sizes where the profits can be quite large and you only need small capitals to get them.
The data and software are provided free of charge; you don’t have to pay, all you have to do is log into your broker’s website. Download the software, the graphics will be displayed as soon as you log in.
There are no commissions; well, you pay in costs for spreads that depend on how much you trade.
As an individual, you face a lot of competition, especially from huge money-related foundations with prepared marketers and many dollars invested in programming and equipment.
There is no centralized stock exchange, unlike the stock market. A broker acts like an exchange, making it a market maker.
You have no idea about capital exposure and how to calculate leverage, then you will suffer huge losses.
Good traders enter trading with only 2% initial capital and no more than.
The forex market moves differently throughout the day, there are only a few peak hours that are worth your trading time.
Margin trading also comes with a high level of risk that a smart trader should avoid. Always evaluate your capital and the amount of risk you are willing to take when trading.
Never enter a Forex trade with an amount you cannot afford to lose.
Likewise, it is your commitment to see every one of the dangers that accompany Forex exchange before you go before your first exchange.
Leverage is one of the biggest risks in Forex trading. This can bring a big profit if you are a winning side, but on the other hand, a huge loss if you are losing.
Forex trading in Islam.
According to Islamic law, it is difficult to answer this question definitively. Trading money under certain conditions is halal as stated by an Islamic specialist, but there are some questions under proper conditions.
This means that any type of transaction that involves an element of interest is completely prohibited according to Islam. Forex trading is not permitted in Islam and is defined very broadly. The forex retailer reflects the market by paying or charging enthusiasm between two parts of each monetary match whose position remains open in the medium term. It seems that it is only permissible as long as (the exchange) is hand to hand. Prophet Muhammad (peace be upon him) had in mind the exchange of various types of goods. This will be done between two countries, recognizing that this is a natural aspect of trade.
Most Forex specialists reacted to show the power and weight of Islamic dealers by making “Islamic Forex Broker” and offering “Muslim Forex Accounts” that work without intriguing fees.
However, “regular” Forex trading offered by Forex brokers, with overnight interest payments or fees, can remove the riba hurdle.
For online trading, there is a need for online currency exchangers for trading crypto currency. Many online exchangers make it easy by providing strong security, fast transactions and stability. Some of them are Binance, changelly and newly introduced Nexchange. These platforms deal with the trading of various cryptocurrencies.