Sharia Forex Trading Strategy to Gain Profits Without Breaking the Law

Forex trading is one way to make money through the financial markets. However, for those who adhere to religious principles, regular forex trading is not compatible with their beliefs. Therefore, a form of forex trading emerged that complies with Islamic law, namely sharia forex trading.

What is Sharia Forex Trading?

Sharia forex trading is a form of foreign currency trading that adheres to sharia principles. In sharia forex trading, there are no elements of usury, gharar, may, and so on that violates sharia law. This ensures that all transactions are carried out by moral requirements and religious values.

The difference with ordinary forex trading

Sharia forex trading differs from regular forex trading in terms of the principles used. In ordinary forex trading, there is an element of usury, whereas in sharia forex trading this is prohibited. In ordinary forex trading, there is no guarantee that every transaction is carried out by moral and religious values.

Advantages of sharia forex trading

The advantages of sharia forex trading include compliance with religious principles, greater transparency, and accountability, as well as improving the quality of capital management. Sharia forex trading allows investors to engage in financial markets without having to worry about violating Islamic law.

In addition, sharia forex trading also has a higher level of transparency and accountability, so that investors can ensure that every transaction made is by sharia principles. With good capital management, traders can minimize the risk of loss and maximize profits.

Sharia Forex Trading Strategy

A. Fundamental Analysis

Fundamental analysis is one of the important strategies in sharia forex trading. In this analysis, traders focus on economic and political factors that affect currency price movements. The goal is to understand how a country’s economic and political conditions affect the value of its currency.

Some examples of information that can be analyzed through fundamental analysis are GDP reports, interest rates, unemployment rates, and political news. By understanding these factors, traders can make the right decisions in entering the market and determine positions accordingly.

To improve skills in fundamental analysis, traders can read books and articles on economics and politics, follow the economic calendar, and monitor economic and political news regularly.

B. Technical Analysis

Technical analysis is another popular strategy in Islamic forex trading. In this analysis, traders focus on currency price action charts to determine trends and predict future price movements.

Some technical indicators that are often used in technical analysis are the Moving Average, Bollinger Bands, and the Relative Strength Index (RSI). Traders can use one or more of these indicators to help understand price movements and make informed trading decisions.

To improve their skills in technical analysis, traders can learn how to use technical indicators, try out various technical strategies, and monitor price action charts regularly. As well as understanding how the market reacts to economic and political news that affects currency prices.

C. Portfolio Diversification

Portfolio diversification is a strategy that is widely used in sharia forex trading to reduce risk and increase profit opportunities. In diversification, the trader enters not just one or two currency pairs, but many different currency pairs.

With a diversified portfolio, traders can limit risks and increase profit opportunities. For example, if one currency pair is losing, it is more likely that another currency pair will make a profit. Thus, losses on one currency pair can be covered by gains on other currency pairs.

To increase portfolio diversification, traders can enter different currency pairs from different economic regions and have low correlation. Also, ensure that the size of the position on each currency pair is not too large so that risks are controlled.

D. Risk Management

Risk management is an important part of sharia forex trading. In forex trading, it is not possible to always make profits, and traders must be prepared to face losses. Therefore, it is important to have an effective risk management strategy.

Several risk management strategies that can be used in sharia forex trading are stop loss, take profit and good money management. Stop loss is used to limit losses at a certain level determined, while take profit is used to lock in profits at a certain level.

Good money management involves limiting the amount of money placed on each trade so that risks are controlled. Also, traders should ensure that they have enough funds to last in the long term and not risk too much money on each trade.

Risk management is a part that cannot be ignored in sharia forex trading. Traders should ensure that they have a strong risk management strategy in place and are ready to apply it to every trade.

E. Patience and Discipline

Patience and discipline are important qualities for any Islamic forex trader who wants to be successful. In forex trading, the desire to make profits as quickly as possible often makes traders tempted to make trades that don’t make sense or don’t fit their trading plan.

To avoid this, traders must have strong patience and discipline. Patience means patiently waiting for the right opportunity to trade, while discipline means sticking to a trading plan and avoiding making unreasonable trades.

Traders must also have the discipline not to chase losses by opening new positions after the previous position experienced a loss. This often leads to increased risk and greater losses.

With great patience and discipline, traders can ensure that they make wise trading decisions and profit in the long term.

Good Sharia Forex Trading Tips

A. Thorough Analysis and Planning

Careful analysis and planning are the basis of any successful Islamic forex trading strategy. Before placing a trade, the trader should conduct a market analysis and develop a suitable trading plan.

Market analysis involves assessing the current market situation and potential future price movements. Fundamental analysis involves assessing the economic and political factors that affect the market, while technical analysis involves using charts and indicators to predict price movements.

Trading planning should take into account the trader’s goals, trading time, and the amount of available capital. It should also consider the risk management strategy and the trader’s patience and discipline.

With careful analysis and planning, traders can ensure that they make wise trading decisions and reduce the risk of loss. It also helps traders to achieve their trading goals more effectively.

B. Focus on Predetermined Strategies

After careful analysis and planning, focusing on a predetermined strategy is the key to success in sharia forex trading. Many traders are tempted to change their strategy every time they experience a loss or see an attractive trading opportunity.

However, this can lead to inconsistent trading habits and affect long-term trading results. Therefore, traders must have the discipline to stay focused on a predetermined strategy and not be affected by changing market situations.

To ensure that trading strategies remain relevant and effective, traders must constantly monitor and evaluate their trading results. This helps traders to refine their strategy when needed and ensures that they are always on the path to trading success.

C. Don’t Rush In Making Trading Decisions

One of the most important things in sharia forex trading is not to rush into making trading decisions. Many traders make decisions too quickly without proper analysis and planning, which can eventually lead to big losses.

Therefore, it is important not to rush and ensure that all the necessary information and analysis have been gathered before making a trading decision. This ensures that trading decisions are made based on accurate and accountable information.

Traders should also have patience and not be affected by the changing market situations. This helps traders to make wise trading decisions and ensures that they are not swayed by market emotions or pressures.

By considering all relevant factors and making careful trading decisions, traders can minimize risks and maximize the chances of success in Islamic forex trading.

D. Patience and Discipline

Patience and discipline are two very important qualities for Islamic forex traders. Without these two qualities, traders will find it difficult to achieve success in trading.

Patience helps traders to stay focused on a predetermined strategy and not be swayed by changing market situations. This ensures that traders are not rushed into making trading decisions and take all relevant factors into account.

Discipline ensures that the trader sticks to a predetermined trading plan and is not swayed by market emotions or pressures. This helps traders to make wise trading decisions and avoid bad decisions.

By maintaining discipline and patience, traders can ensure that they always make wise trading decisions and achieve success in Islamic forex trading.


Sharia forex trading is an alternative for traders who want to follow Islamic economic principles and do not want to be involved in usury practices. Sharia forex trading has several advantages, such as the absence of interest and fairer transactions.

To achieve success in sharia forex trading, traders must have careful analysis and planning, focus on predetermined strategies, not be rushed in making trading decisions, and maintain patience and discipline.

Fundamental and technical analysis, portfolio diversification, risk management, patience, and discipline are some of the strategies that can help traders achieve success in sharia forex trading.

By understanding the concepts and strategies of Islamic forex trading, traders can achieve success in trading and ensure that they adhere to the principles of Islamic economics.

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