Before stating whether Muslim traders can trade carry trades we will learn about the carry trades. A carry trade strategy is also one of the popular strategies but can it be used by a Muslim? In a carry trade, a trader borrows the currency with the low interest rate and sells it to the currency with the higher interest rate. So the trader’s target is to earn interest amount as well. Now let us look back to the topic. Can a Muslim trader do this? According to Islamic rules (sharia law), Muslims are completely prohibited from trading Forex if it involves interest. So now, it is the time to think whether carry trade is approved or not. According to the definition above carry trade involves interest so obviously, it cannot be done by the Muslim traders.
Trading Forex with the Muslim mindset
A Muslim’s mindset is adhering to the laws of Islam. If you are adhering to the laws of Islam you will be able to trade the market successfully. In the Forex market, things don’t happen as you wish so you need to be intelligent enough to wish the reality. According to Muslims they never go beyond the imaginations when they live so it’s the same when they trade the Forex market. Going beyond the imaginations, expecting too much and being greedy are not in the vocabulary of Muslims (Not everyone) because they cannot be. According to their belief, everything happens according to the will of the god. But we are not telling that you can just dump large amount in trading just because everything happens according to the will. The gist you should hold here is that being greedy will kill you so in the Forex market never be greedy.
Never associate interest
If you are trading as a career it should be something you love to do. Don’t you think that the profession a person does should be something that he or she loves? Actually in the Forex market, most of the professional do not love their career because it gives them the excitement, stress and so and so. But according to Muslims, it’s a different story they don’t trade the market with the excitement because they accept what they gain, they don’t trade carry trade since they do not want the stress they gain by obtaining the interest. To be precise the always trade with swap free trading account and they can carry their position in the long run.
Being biased in the market
Whatsoever, let it be profits, let it be losses remain biased in the market. If you are new to the market, of course, it will be hard but with the time it will be great that you are biased. When it is about Muslim traders even if they are naïve they will be biased. But in order to execute the best possible trades in the market make sure that you are not biased rather take rational trading decision. And a perfect trade setup will help you to carry your trades in the long run in swap free trading account.
Summary-In the Forex market things can turn out to be simple only if you assume or make it simple. Muslim traders do not consider Forex trading as a heavy target instead they consider it light so it will lead them towards success. Actually, success is what matters so to become success learn the strategies followed by the Muslim traders. As we mentioned above there are certain important aspects of the Forex market which should be analyzed with the mindset of a Muslim trader.
You can open Islamic Accounts here.