MGFOREX – Trading Contests But Limited Trading Control

MGFOREX is a Forex broker that offers its own trading platform for its clients. The main drawdown of this trading software is that it handles positions only in a FIFO (First In First Out) manner – so, if you just cannot close a new position if there is some another position for the same currency pair is still open. On first sight, this shouldn’t be a big problem, because this will limit only positions for the same currency pairs, but having different longevity and hedging position is very important for the professional Forex traders, and this limit will obviously make their life different. As for the good sides of MGFOREX, I can mention – first, Forex trading contests (on demo accounts) and the fact, that Muslims can open no-interest accounts, where overnight interest is removed with fees.

Forex Trading and Islam

The topic of Forex trading prohibition in Islam is vast and controversial. Many points of view exist on different aspects of on-line Forex trading including - spot trading, futures and options trading, margin trading, overnight interest, etc. The majority of the Islamic jurists agrees that Forex trading can comply with Sharia only if it is spot trading (while futures and options are considered to earn Riba) and if it doesn't involve any overnight interest (or interest hid by commissions, though Muslim traders should know that not all commissions are to hide overnight interest). One of the main point of debate lies in margin trading (almost every transaction in Forex is based on margin) and hedging (it is compared to futures trading usually). Dr. Mohammed Obaidullah of Universiti Tun Abdul Razak (located in Malaysia) discusses this topic in his article - Islamic Forex Trading. It is a well grounded article covering every aspect of Forex trading and providing references to the fundamental Islamic sources. Among other things, Dr. Mohammed Obaidullah proves margin Forex trading to be legal for Muslims, as long as it doesn't involve any Riba (unlike some other Islamic jurists who look at margin Forex trading as forbidden activity). In this articles the Forex hedging is also analysed and is seen as the source of Riba income. I strongly recommend reading this article to all Muslim traders and those who want to start trading Forex while remaining a lawful Islamic believer.

Muslim Forex Brokers

Tadawul FX - a special broker, which provides Forex trading through Metatrader 4 platform and offers special accounts for muslim traders (with no overnight interest). You can get more information about this broker here.