Brokerage firms offer two types of Forex:
1- Regular Forex:
Most brokerage firms offer this type of forex and it is more common than its counterpart, and the regular forex is characterized by:
• Acceptance of contingent interest on the loan that brokerage firms offer the investor when trading on margin.
• Transfer of fees for contracts overnight The longer the exchange contract runs and the investor does not cancel this deal, the higher the fees.
• Some companies take a percentage of the profit value from the investor, but in the event of a loss, these companies have no relationship.
2- Islamic Forex
Some companies tried to demonstrate the legitimacy of forex until they called it Islamic forex in an attempt to trick Muslims into doing business with these companies and opening accounts with them, and it is characterized by:
• Do not take interest on loans even if the loan has lasted for days and the deal has not been closed.
• Cancellation of overnight fees, even if the transaction lasts for days, they do not charge any fees.
Examples of companies offering Islamic Forex accounts include the Arab Money Brokers Company (AFB), as it says on their website:
It was also stated on the same website:
Risks related to foreign exchange transactions:
The process of trading forex over the internet is one of the operations most exposed to external risk as the market in which this speculation operates is very sensitive to many internal and external factors that have a negative and positive effect on the market Forex trading over the Internet is exposed to the following risks:
• The extreme volatility of exchange rates and the difficulty of accurately predicting the movement of these fluctuations, which requires speculation in forex trading, the continuous monitoring of the evolution of global exchange rates, and the fact that this market operates 24 hours a day, it is necessary that the speculator remains in constant contact with the market to track fluctuations. At prices that can occur at any time.
• Brokerage firms do not pay any compensation to speculators in the event of bankruptcy. The bankruptcy of companies can result in the speculator losing his money in his account with these companies, and this is due to the nature of the unregulated and decentralized foreign exchange market.
• There are many fictitious companies that are difficult to distinguish from the real companies that are registered.
• There are several risks involved in using the Internet to speculate on foreign exchange: The Internet connection may fail when concluding trades The speculator cannot conclude trades, the prices of which change rapidly, often resulting in losses.
Since speculation in Forex trading involves a great deal of risk, many forex companies tend to point out these risks to speculators in order to deny their responsibility in the event of a loss, and hence the following statement came on the websites of many of these companies:
operations in this market, and this trade is not necessarily compatible with all investors, and therefore investing in this market requires a high level of risk awareness and caution when making a buying or selling decision. “
It is a method of studying past price movements, regardless of their reasons, for predicting future trends based on certain assumptions.
The technical analysis is carried out using graphs showing the movements of currencies for past periods of time, and with certain techniques he can predict the prices in the future and on the basis of this prediction and according to the strength of his probability, the speculator will make decisions about these To buy or sell currency.
It can be said that technical analysis can enable the speculator to understand the general market situation at the present moment with several indicators to help predict price changes in the near future
Also known as fundamental analysis, it is based on studying economic and political influences and anticipating their effects on the price movement of a currency.
If technical analysis is based only on price movements, then news analysis is based on analyzing the reasons for that movement.
In order for the speculator to benefit from news analysis, he must receive economic news, particularly for large countries such as the United States of America, Japan, and the European Union, as well as news statements on the political and economic conditions of those countries; Because these news and statements have a direct effect on the currency rates of each country .
The aim is to read those factors and influences which in turn change the direction of psychology and beliefs about currency prices.