What is Forex trading?
Forex, also known as foreign exchange and foreign exchange market, is where currencies are traded. Currencies are important to people all over the world.
Currencies are necessary for exchange to conduct foreign trade business. It is the largest and most liquid market in the world. It dwarfs the various markets to the extent of even stock trading systems with normal exchange valuations around.
It is a global decentralized marketplace for exchanging monetary forms. This market defines distance trading. The main participants in this market are the larger universal banks. There is a wide range of different types of buyers and sellers in this market.
The Forex trading market is unique due to the following characteristics:
A huge volume of exchange, speaking of the largest class of resources on the planet, which causes high liquidity;. A continuous task, 24 hours a day, except at the end of the week;
• Geographic dispersion;
• Continuous work 24 hours a day, except for weekends;
• Variety of factors affecting exchange rates;
• Low rate of return compared to other markets;
• Using leverage to increase profit and loss margins.
The Forex trading market is called a haven of perfect competition.
With such a huge number of experts associated with Forex trading, there are several dangers associated with it that need to be considered.
One needs to be sure that their internet connection and computer are working smoothly at all times. We all know that things like this happen: servers go down and our computers freeze or shut down depending on the current activity. This may affect transactions, so be aware that something may 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 open 24 hours a day, 7 days a week. It doesn’t matter your time, location, internet connection and computer, you can log in anytime to rest me trade.
It’s scalable. With this feature, the trader can control and limit the risk depending on his account.
Leverage is one of the huge advantages of the Forex trading market, where brokers allow trading up to 2% of the total contract size compared to the stock market. It is possible to use a small account for trading large amounts, where the winnings can be quite large and only small capitals are needed to obtain them.
Data and software are provided free of charge; you don’t have to pay, all you have to do is log in to your broker’s website. Download the software, the charts will be displayed as soon as you log in.
There are no commissions; well, you pay costs for spreads that depend on how much you trade.
As an individual, you face a lot of competition, especially from huge funds associated with money, with trained traders and large resources invested in programming and equipment.
There is no centralized exchange, unlike the stock exchange. 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 big losses.
Good traders start trading with only 2% of initial capital and no more.
The Forex trading market moves differently throughout the day, there are only a few peak hours that are worth your time to trade.
Margin trading also has a high level of risk that a smart trader should avoid. Always assess 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.
It is also your commitment to see all the dangers that accompany Forex trading before you go for your first trade.
Leverage is one of the biggest risks in Forex trading. It can bring big profits if you win but on the other hand huge losses if you lose.
Forex trading in Islam.
According to Islamic law, this question is difficult to answer unequivocally. Trading money under certain conditions is halal, according to an Islamic expert, but there are some questions under the right conditions.
This means that any 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 mirrored the market by paying or charging the enthusiasm between the two parts of any money match whose position remains open in the medium term. It would seem that this is permissible as long as it (the exchange) takes place from hand to hand. Prophet Muhammad (peace be upon him) meant the exchange of various types of goods. This will be done between the two parties, recognizing that it is a natural aspect of trade.
Most Forex professionals have responded to demonstrate the power and weight of Islamic dealers by creating an “Islamic Forex Broker” and offering “Muslim Forex Accounts” that operate without installments.
However, “regular” Forex trading offered by Forex brokers, with same-day interest payments or fees, can get rid of the fish obstacle.
Online trading requires online exchanges for crypto currency trading. Many online exchanges help by providing strong security, fast transactions and stability. Some of them are Binance, Changelly and recently introduced Nexchange. These platforms deal in the trading of various cryptocurrencies.