Is Forex trading halal Muslims? In-depth analysis by TU

Forex trading is a popular investment option for many traders worldwide. But, for Muslim traders, they may ask – is Forex trading halal, since the permissibility of Forex trading can be a concern? 

Traders Union examines the permissibility of Forex trading from an Islamic perspective, providing valuable insights for traders who seek to trade Forex in a halal manner.

Overcoming usury and interest charges in compliance with Islamic principles

Traders Union finds Islam prohibits usury or riba in financial transactions, including charging interest. Forex brokers charge swap commissions, a form of interest when holding a position overnight, which is not allowed in Islam. To overcome this, brokers introduced Islamic Forex trading, where investors can hold positions without paying interest. Regular Forex trading accounts also eliminate overnight interest charges and comply with Islamic principles. Islamic banking has emerged due to the prohibition on appeal, and Muslim theologians have varying opinions on what constitutes riba.

Understanding the concept of swap-free trading

Many brokers offer swap-free Islamic trading accounts that comply with Islamic principles by prohibiting the accumulation and payment of interest rates in Forex trading. These accounts eliminate the possibility of earning profits during a swap and ensure swift transaction execution. Additionally, they trade currencies within the same setting as the contract by removing future and forward transactions.

How to apply for an Islamic account

Here is a step-by-step guide on how to use an Islamic trading account with XM broker:

  1. Open a trading account with XM broker.
  2. Login to the members’ area on XM’s website and get your account validated by the broker.
  3. Request to convert your account to an Islamic trading account.
  4. XM will receive your request and shift your account to a swap-free status.
  5. Do not trade before your account is converted to Islamic history, as you will be charged interest, and XM won’t be able to switch your account to swap-free mode.

Guide to halal investments

Traders Union has three tips on how Muslim traders can avoid haram transactions in Forex trading:

  • Trade on an Islamic account with a broker that respects Islamic principles and ensures transactions comply with halal and haram rulings.
  • Avoid turning trading into a gamble by monitoring investments, using reasonable leverage, and following risk management rules.
  • Pay taxes and follow regulations to remain compliant and avoid haram transactions.

Top three Islamic trading accounts with swap-free features for 2023

TU presents a concise list of the three best Islamic swap-free accounts for Muslim clients:

XM Islamic account

This broker review examines XM Group, a regulated online broker with a personalized approach and top-notch customer service, catering to over 1.5 million clients in 196 countries. Offering a wide range of financial instruments, including Forex and CFDs, XM boasts a minimum spread of 0.1 pip, no hidden fees or commission policy, and transparent trading conditions that don’t compromise on feeds.

AvaTrade Islamic account

AvaTrade is an award-winning, regulated market maker with over 250 financial instruments across various trading platforms, including Forex, CFDs, stocks, and shares. With a minimum deposit of $100, they offer competitive conditions to all clients, including no swap fee for Muslim clients. Transactions follow Sharia law and are settled immediately. However, extra fees may apply, so Muslim traders should carefully consider their options.

eToro Islamic account

Established in 2007, eToro is a top-ranked broker holding brokerage licenses from US, Cyprus, and Australian regulatory authorities. With over 2,000 trading instruments and a copy trading service, eToro offers an Islamic account with no special conditions available to traders worldwide. Positions are closed and reopened daily at 5 pm New York time.


Muslim traders must prioritize understanding the permissibility of Forex trading according to Islamic principles. By opting for Islamic trading accounts and following the guidelines provided by trusted sources like Traders Union, traders can ensure that their Forex transactions are halal and compliant. Visit the Traders Union’s official website to know more!