Forex Dictionary Terms

Speculator

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Definition – What does Speculator mean?

A speculator is an individual who takes on higher than average risks in hopes of collecting higher than average rewards. Currency traders are speculators because they often make directional trades that will only profit if their guess on future market conditions turns out to be right. The primary difference between a speculator and a gambler is that speculators have the enough capital to justify putting some on a hunch.

ForexTerms explains Speculator

The currency market is extremely high risk because the huge range of uncontrollable variables and events mean the future is unpredictable. Many of the best speculators are successful because they have been able to match strategy with market experience, cutting losses quick and letting gains grow. Having a larger capital base also allows speculators to comfortably deploy risk capital along a spectrum of trades, meaning one good trade can make up for multiple bad ones.

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