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Definition

In the financial world, speculating can be described as the act of making an investment in a financial asset, hoping to make a profit when the asset appreciates (or depreciate, when short selling)over time. In layman’s terms, a speculator will aim to “buy low and sell high (or sell high and buy back at a lower price when shorting!).

In the forex markets, retails traders are speculating when they try to make profit when one currency appreciates versus another currency.