“When we receive a request to open an account for a client over the Internet, we call the client and propose providing a training course for a week with a trading expert in order to teach the average person about the basics of online trade and to help them gain experience into the optimum time to buy and sell,” said Ammar Al-Khalifa, a customer service officer at one of the Forex online trading companies.
“The client can establish a demo account without any deposit and can eventually begin trading with $100,” he said.
Investments are deposited via a checking account or credit or prepaid card.
“We then send our clients economic analysis and recommendations,” he said. “We take three percent commission on all transactions. This is a global company that has a license from the Finance Services Authority (FSA).”
Mohammed Al-Wazeer, an economist consultant and director of investment funds at First Capital, cautions investors.
“Online dealings are very dangerous, as you might achieve very high profits, only to lose them all in a single deal due to poor planning or failing to follow up on recommendations and trends,” he said. “These transactions are in need of professionals who are knowledgable about the global markets and know when to make the right decision at the right time.”
“The greatest danger lies in the fact that these companies are all located outside the Kingdom,” said Al-Wazeer. “If these foreign companies are forced to close down in a crisis, clients will not be able to reclaim their money. The average person is only made aware of this harsh reality when it’s too late or from another person who has gone through such an experience.”
“I would advise people to first make sure of the location of the parent company and verify their license through the Capital Market Authority,” he said. “Contracts should not be signed until would-be investors have sought the advice of an experienced consultant.”
A safer solution would be to invest in investment funds and bank portfolios, which diversify investments between currencies, properties and shares, substantially reducing risks.
“The Internet is an open network, which makes a lot of users vulnerable to dealing with unlicensed companies,” said Khaled Abdel Wahed, a legal adviser.
“Online trade, whether in currencies or in gold or silver, is religiously permissible,” said Abdullah Al-Jafen, a preacher and Islamic thinker. “The most dangerous issue is the amount of time and money wasted on such sites. Spending hours monitoring profits and losses at the expense of other life duties is un-Islamic.”
