Forex or Foreign Exchange is a popular trading business platform. People trade on foreign currencies to make a profit. In this fast-evolving market of forex trading, swap free trading accounts are preferred for practicing Muslims in trading. One can open a swap free forex account that does not charge interest. These are also called as Islamic forex accounts because of forbidden interest rates.
Swap free forex accounts:
A trader who has a swap free forex account should open and close their trading positions within the day itself. If all traders open and close their positions during the day trading, then brokers will not charge any interest. In fact, when someone leaves his/ her position open for next day trade, there is a possibility of interest rates because of difference in currency exchange rate. The only thing is that the traders have to reach a reliable forex broker for opening an account.
Swapping forex in detail:
Some forex brokers give interest to the traders who have long position, and some of them charge traders who have short position. Moreover, also there are some firms which do not pay or charge interest and perform rollover the open position to the next trading date. This process is called swapping of forex positions.
For example, if any trader takes a short position and keeps it for the next day trade, then forex firm or the broker would sell on behalf of the trader. This will become the rollover of the position to the next value date. Since there is a difference between exchange rates of currency pairs, forex traders will receive a small amount of profit for holding an overnight position. It will be the same if any trader takes a long position and keep it for the next day trade.
In case of swap free forex accounts, the forex brokers book profit or loss statement on the basis of daily trading. This allows practicing trading by Muslims to keep their positions without any major benefit or charge. Well, many people do not understand the concept of swap free accounts. This is the reason that there are individuals who are still waiting to join forex market. Although there are many number of people involve in forex trading, it will be the best to comprehend with its concepts if you have any doubt.
While finding a reliable forex broker, it is essential to remember a word ‘caution’. You have to clarify each and every statement related to the forex brokerage and get a complete picture of any additional charges.
Different traders use different trading platforms. It is the individual choice of traders whether to have technical analysis platform or not. If someone has an MT4 platform, then it is recommended to remove all the complexities before opening a swap free forex account.
Furthermore, it will be better to enable plugins to enhance the experience of advancement in technologies within the terminal. Swap-free accounts are available with different traders. You have to manage the effectiveness of its use with the help of reliable forex broker.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.