Foreign exchange trading, or forex, has a long history that dates back to Ancient Egypt. Over time, the currency exchange system developed rapidly and eventually spread to global financial centers such as London, New York, Paris, Frankfurt, and Berlin. This development gave rise to a foreign exchange market that is accessible online to the public. However, despite its appeal, there is a debate regarding the legal status of forex trading from an Islamic perspective. As an economic system based on the Qur’an and Sunnah, Islamic economics needs to provide clear rulings on this practice. The world of trade and economics is greatly influenced by technological advancements. One of the results is the emergence of the Foreign Exchange (Forex)/Sharf trading system in the form of e-trading, which is a business connected through the internet.
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Trading is any buying and selling activity in the capital market carried out in a short period of time to achieve maximum profit. Forex trading itself is a process in which a trader buys or sells a certain currency, then the exchange rate of that currency continues to fluctuate based on supply and demand in the market. Price movements are influenced by various factors such as economic conditions, central bank policies, geopolitical conditions, and market sentiment. There can be very attractive profits if managed successfully. Conversely, this buying and selling system must pay attention to the characteristics of trading, trading strategies, and elements that can affect a trader’s ability to achieve profitability if they want to avoid large financial losses.
In the digital era, many people are engaging in online forex trading, especially among young people. They want to earn money overnight, but instead of gaining profits, they often go bankrupt in a single night. This is due to the lack of knowledge among beginner investors in this business. In fact, what needs to be considered when entering this business are discipline, good financial management, stable emotional control, and a good market entry strategy.
Basically, foreign exchange trading is permitted under Islamic law, but there are several conditions that must be observed, namely that financial transactions must be free from elements of riba (interest), gharar (uncertainty), and maysir (excessive speculation). The Indonesian Ulema Council (MUI) states that spot forex trading is allowed because it does not contain interest and is conducted directly. However, forex trading is considered haram if done using Forward, Swap, and Option systems, because they contain speculative elements and uncertainty. Therefore, Muslims need to understand the type of transactions they engage in so as not to fall into practices that are contrary to sharia law.
Conclusion
Foreign exchange (forex) trading has evolved from ancient currency exchange practices into a modern digital system that is widely accessible, especially in the era of technological advancement. Its appeal lies in the potential for quick profits, attracting many—particularly young people—to engage in online trading, often without sufficient knowledge or preparation. From an Islamic perspective, forex trading is permissible under certain conditions, namely that transactions must be free from riba (interest), gharar (uncertainty), and maysir (excessive speculation). Spot forex is considered halal, while systems like forward, swap, and option are deemed haram due to their speculative nature. Therefore, it is essential for Muslim traders to understand the mechanisms and types of transactions they engage in to ensure their financial activities align with the principles of sharia.
By: Intan Rahayu Utami
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