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Who is a speculator. How do they work in stock trading?

Posted by on Jun 8, 2017 in General | Comments Off on Who is a speculator. How do they work in stock trading?

Let’s face it!

We all love making money and when we make a landslide profit on anything no one is happier than us. Everyone strives to make extra ordinary profits and they love the fact that they managed to make super facts even without having to work doubly hard.

In the stock market, unlike other non speculative businesses, it is possible to make extra ordinary profits and sometimes make such prolific losses that at the end of the day they can off-set each other. Sometimes, a trader may have a winning streak and sometimes he may make a series of continuous bad decisions at the stock market which can almost neutralize all his earnings.

Who is a speculator?

A person engaged in trading at the stock market that trades in all or any kind of commodities, stocks, shares, currency indices, etc but with more than the average risk that is associated with safe trading. He is not necessarily reckless with his investment portfolio or a lazy trader who does not read and research his options well.

In fact, he is someone who is takes large risks and all in the hope of making extra big and quicker profits as compared to other traders who tread slowly and carefully.

A speculator is a well read and a person who knows the ins and outs of the stock market. In fact, he is also most of the times someone who knows that taking big risks can mean sometimes to have humongous amounts of losses and therefore he will only stake the amount of money that he can safely afford to lose.

Speculators prefer futures markets:

The speculators prefer futures markets and they with their expertise can gauge the future price of a commodity and they usually like to trade in investments that are highly leveraged so that they have the ability to make good gains at the stock market.

Having a penchant for attempting to speculate:

The breed that we see in the market today has an undying penchant for speculating those commodities which are difficult to predict the price of and especially so in markets that are extremely volatile. The speculators prefer to operate in much shorter time frames tan someone who is traditionally into trading of the commodities. They get a kind of kick to be able to predict the commodities price in conditions that are extremely unfavorable in the market and still they believe that they will be making super profits.

How do you find out who is a speculator?

  • A speculator is a person who is characterized by taking heavy risks in volatile market conditions.
  • He is also someone who will trade at shorter periods and commodities that are high in leverage to be able to make extra super profits;
  • Speculators like to trade in futures contract mostly because they have the scope to speculate the prices. There are various robots such as Infinity app to assist a safely done speculation.

The speculation bubble:

Say that a speculator called Mr. Z has reason to believe that gold price will increase in the next two months. So, he buys loads of gold as much as he can afford to buy. This demand that is created in the market for gold is seen as a positive sign and a lot of traditional buyers also start stocking and hoarding gold thereby further increasing the demand and creating a bubble which was originally started only with speculation. This is indeed a positive trend and ultimately helps to increase the price manifold from the actual price of the commodity purely based on demand- supple rule.

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