Even though the name of the account is associated with a religion, the phrase "Islamic account" is not related to the faith. This type of accounts is provided for the Muslims, whose religion, or better to say the law of the Sharia, forbids to work with the accounts, where the swap is applied.
Swap – it's some the commission, which is charged for the transfer of the opened positions over the night.
What is SWAP
Swap is commission charged for the transfer of the opened positions over the night. All the matter is that every intra-day order on the currency market is included in the Spot category of deals. According to it, the full amount of delivery is fulfilled on the next day. However, there are a lot of traders who use this opportunity on Forex and don't close their positions at the end of the day. Some want to get more profit in the new trading day, others leave the unprofitable trades and hope, that by the next day market will begin to move in the opposite direction, which is good for them and as a result, the losses will change to the profit. In both cases, the position, which is opened during the day, will be transferred to the next day. Such trades are closed at the end of the day and opened at the beginning of the next day automatically. This is the Swap operation.
The broker carries out a charge of the commission according to the current value of the currency pairs' rates. In different cases, this value can be positive, as well as harmful. The positive sum is credited on the trader's account, negative is debited. This sum is the swap. It's usual for the Forex market. So, some brokers, to protect their clients, propose them Islamic accounts, which are swap free. While trading on such accounts, there will be no Swap sum credited or debited from the account.
How to Open an Islamic Account
To open such an account you should learn rules and terms. This moment is considered to be very important because these rules define your future trading. Next, a trader should provide the documents and the evidence of fact, that he preaches this religion.
Swap-free accounts allow the trader to escape the necessity of controlling the size of the currency discount rate all the time, and it makes the trading more simple.
To move your Standard, Mini or ECN Zero account into the group of the swap-free accounts, you need to make a request to the support and to get qualified help, and your accounts will be moved to the swap-free group in case you meet all the requirements.
Swap free accounts allow the trader to escape the necessity of controlling the size of the currency discount rate all the time, and it makes the trading more simple. Also, it helps to take into consideration the commission for transferring the position in advance while calculation of the planned trading results.
While trading under the conditions of swap free account, clients of the JustForex don't lose and don't receive any funds while the open order is moved to the next day. Holding the opened position for the long period, the trader should not worry about the deduction of such commission as swap.