The speculator is the one who doesn't care much about the underlying long term trend of the market. Speculator's main concern is what investors are doing and how their actions affect the price movements of shares in the short term. In the short term view, markets are known to swing a lot on the upside and on the downside, which opens up ample opportunity for a speculator.
If the underlying long term trend is going up, speculator will try to profit from rising prices, and if underlying trend is going down, he will aim to make money from falling prices. Therefore, short term movements of the market are the main and the only point of focus in the eyes of a speculator. The best and probably the only way to forecast price movements accurately, is to examine price charts and observe what market has been doing and what is currently doing.
The problem with speculating is that players are dealing with a zero sum game. As we already mentioned, speculators attempt to profit from the short term movements, but the thing is that stock markets cannot produce wealth in the short term. Market always sums to zero in the short term view. In the medium to long term view however, market does produce wealth as a result of business or economic growth.
For short term traders as a group, the sum of all their losses and gains must be zero or actually negative after the brokerage costs. To put it in a different way, speculating is like playing poker – some players win, some lose, but no wealth is generated at the end of the game. Some speculators most definitely win by trading short-term, but they had to invest a lot of time in learning and experiencing to get that far. It is said that majority of speculators lose in this game, but on the other hand, so much more wealth is made by those fewer professional speculators.