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Islamic Careers
Islamic Careers

Is It Halal or Haram for Muslim to Trade Forex?

The foreign exchange market (forex, or currency market) is a global, decentralized market for the trading of currencies such as rial, dollar, euro, pound, yen, dinar, etc.). If one who intends to trade currency, feels the value of a certain currency is going up, he will buy it and when its value dwindles, he sells it, or he buys expensive currencies and then after a while he sells the currency to gain profit.

Currency trading and exchange first occurred in ancient times. Money-changing people, people helping others to change money and also taking a commission or charging a fee were living in old times. Currency and exchange was also a vital and crucial element of trade during the ancient world so that people could buy and sell items like food, pottery and raw materials. There were times when a proxy was appointed for such trading. The agent would conduct the transaction and the profit or loss would be incurred by the capital owner.

History of Islamic economics

Between the 8th and 12th centuries, the Muslim world developed many advanced concepts, techniques and use in production, investment, finance, economic development, taxation, property use such as Hawala, an early informal value transfer system, Islamic trusts known as waqf, systems of contract relied upon by merchants, a widely circulated common currency, cheques, promissory notes, early contracts, bills of exchange, (mufawada), advanced agricultural techniques, high literacy rates, and enlightened capture and use of slaves.

Specific Islamic concepts involving money, property, taxation, charity included
• zakat (the "taxing of certain goods, such as harvest, with an eye to allocating these taxes to expenditures that are also explicitly defined, such as aid to the needy");

trade-Ummayads

When Mohammed died in 632 AD, his second wife's father, a rich man named Abu Bakr, took over the leadership of the new religion of Islam, and of the newly united Arab tribes. Mohammed left no sons, and in any case there was no tradition of sons taking over in the Arab world. Abu Bakr, who was pretty old, only lived for two years after becoming Caliph, but he managed to unite the whole Arabian Peninsula under Islam.

There was a rebellion of the Arab tribes after Mohammed's death, which we call the Ridda. With their leader gone, the tribes wanted to go back to being independent. Abu Bakr took an army and succeeded in destroying the Ridda and bringing those Arab tribes back under Islamic control.

trade-prophet Mohammad

Mohammed was born in the Arab trading and pilgrimage city of Mecca, in the Arabian peninsula, between 570and 580 AD. His parents were part of a family of traders, not among the ruling families of Mecca, but certainly not poor either. Mohammed himself however grew up poor, because both his parents died when he was still very young. Probably his grandfather brought him up.

When he grew up, Mohammed married a wealthy widow named Khadija, whose first husband had been a trader, and so he became well-off again. Probably he became a trader himself.

The Relationship Between Trade & the Spread of Islam

Trade has played a role in the spread of Islam since the beginning of the religion. As an important trading post with vibrant economic activity, the city of Mecca, in the Arabian Peninsula, was a valuable setting for Islam, providing important context for Islam's relationship to trade. Expansion through trade, in tandem with conquest and missionary work, led to the development and spread of Islam throughout all of Africa, parts of Europe, Asia and beyond. Whether small minorities or entire regions converted to Islam, the relationship between trade, missionary movements and conquest are integral in understanding Islam's worldwide presence.

Early Trade Connections

Trade in the Islamic Empire

The Islamic Empire’s great endeavors and developments in trade proved to be a major benefit to the Muslims, as well as to the rest of the world. International trade increased and maintained expansion of the empire. Materials for manufacturing purposes, luxuries, and food were in great demand and supply among the people. The flow of products taken in for sale at the lowest possible prices improved the revenue of merchants, bettered the speed of import, and advanced the influence of traders internationally.

Major countries such as India and China exported pepper, spices, valued stones, fine cloth, and ceramics to the Muslims, in exchange for coral ivory, and textiles. The Vikings and the Russians also traded luxurious furs, slaves, and wax in exchange for Muslim-produced textiles and metal goods. Besides these valuables, the Arabs were famous for also exporting items such as war armaments, refined sugar, and paper with merchants of Iranian, Turkish, Jewish, and African descent.

The pattern of trade

The global economy has grown continuously since the Second World War. Global growth has been accompanied by a change in the pattern of trade, which reflects ongoing changes in structure of the global economy. These changes include the rise of regional trading blocs, deindustrialisation in many advanced economies, the increased participation of former communist countries, and the emergence of China and India.

Changes in the global economy
The main changes in the global economy are:

The emergence of regional trading blocs, where members freely trade with each other, but erect barriers to trade with non-members, has had a significant impact on the pattern of global trade. While the formation of blocs, such as the European Union and NAFTA, has led to trade creation between members, countries outside the bloc have suffered from trade diversion.

Why do countries trade?

Countries trade with each other when, on their own, they do not have the resources, or capacity to satisfy their own needs and wants. By developing and exploiting their domestic scarce resources, countries can produce a surplus, and trade this for the resources they need.

Clear evidence of trading over long distances dates back at least 9,000 years, though long distance trade probably goes back much further to the domestication of pack animals and the invention of ships. Today, international trade is at the heart of the global economy and is responsible for much of the development and prosperity of the modern industrialised world.

Start Your Own Small Business

Wouldn't it be great to be able to quit your job, be your own boss and earn a paycheck from the comfort of your own home? The good news is that with a little planning and some startup money, it is possible!
Let's delve a little deeper into how to start a small business from home and help you decide how much planning and money you'll need to be your own boss.

Creating the Concept

Before quitting their jobs, the potential entrepreneurs must first think of a concept, product or service to generate a steady income. And while that may sound easy, it's not. You should conceive a plan that puts your knowledge, experience and expertise to use but in a way that allows you to make the most amount of your money.

8 Steps To Becoming Your Own Boss

Working in your pajamas, setting your own hours, having good coffee at your desk for a change ... there are lots of reasons people dream of leaving the normal workplace and launching out to become their own boss. The perks are great, but the work is still hard. If you're serious about being your own boss and working from home, you can definitely do it; here are the steps you need to take.

Know Your Financial Situation

The essential first step to becoming your own boss is figuring out how you're going to write your own paycheck. You need to know - to the dollar - how much money your own business will have to make in order to keep operating and keep providing you with a livable wage.

How To Start Trading: Conclusion

As a trader, you can be your own boss, set your own schedule, work from home and have the opportunity to reach unlimited income potential. While it is easy to get into trading, it is challenging to become a successful trader. It’s like football: it’s easy to get out on the field and toss the ball around, but it’s a whole other ball game (no pun intended) to become a pro player. Like the football player, you have to put in your time if you want to be successful.

This guide serves as an introduction only – it is not intended to provide all the information you will need to be a profitable trader. In addition to the topics covered in this introduction, you will have to learn about the markets – what they are and how they work – and you will need to understand margin, leverage, the tax implications of trading, how to keep accurate records and the extremely important concept of risk, to name a few. You can read more on all of these topics in part two of our beginner trading series.

How To Start Trading: Live Trading Performance

The goal of evaluating any aspect of a trading plan is to minimize risk, create consistency and generate greater profitability. Even after a system “checks out” during testing, it is important to continue evaluating a system during live trading. Measuring live trading performance allows you to determine how good your trading plan really is.

How To Start Trading: Testing Your Trading Plan

An integral part of trading plan development is testing the system to determine its expectancy – how much money could the system make in a live market? Most of us have seen the warnings posted on various financial Web sites and literature about how “Past performance is not indicative of future results.” While this is certainly true of trading plans, there are measures you can take to determine if a plan is likely to succeed in the future: Tebacktesting and forward performance testing.

Backtesting
The term "backtesting" refers to testing a trading system on historical data to see how it would have performed during that time period. Most of today’s trading platforms support backtesting, and you can quickly test ideas without risking the money in your trading account. Backtesting can be used to evaluate simple ideas, such as how a moving average crossover would perform or more complex systems with a variety inputs and triggers.

How To Start Trading: Trading Plan Development

Before learning about trading plan development, it is important to note the difference between discretionary and system traders. Traders typically fall into one of two broad categories: discretionary traders (or decision-based traders) who watch the markets and place manual trades in response to information that is available at that time, and system traders (or rules-based traders) who often use some level of trade automation to implement an objective set of trading rules.

How To Start Trading: Order

A trade order is an instruction that is sent to a broker to enter or exit a position. While it can be very simple to enter and exit a position – push the “buy” button to get in and press the “sell” button when it’s time to get out – trading in this manner is both inefficient and risky. If you trade just using the buy and sell buttons, you can sustain losses from slippage and from trading without a protective stop loss order.

Slippage is the difference between the price you expected and the price at which a trade is actually filled and can be considerable and costly in fast-moving or thinly traded markets. Certain order types allow traders to specify exact prices for trades, thereby minimizing the risks associated with slippage.

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