Speculation in the stock market: a comprehensive explanation with the best successful strategies

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  • January 7, 2024
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There is no doubt that trading has become a profession for those who do not have a profession, as everyone has become an expert in studying the market and technical analysis. The discussion on this topic may be long, but we will only try to address speculation, which takes up the lion’s share of the discussion space on social media. The field of stock speculation is shrouded in mystery, and the most dangerous thing is that it has become a front for scams targeting novice traders. This prompted the blog team to prepare this simple article, which will help you become familiar with the basics of speculation in the stock market.

Speculation in the stock market: a comprehensive explanation with the best successful strategies

The website team explained speculation in the stock market from scratch to help beginners learn the secrets of speculation in the stock market and know the best successful strategies to ensure profits.

What is stock speculation? A simple explanation for beginners

Speculation is the process of buying stocks with the hope that their value will rise in the short term, and then selling them to make a quick profit by taking advantage of the price difference. The profit margin during speculation is often small, but investors can achieve good returns by doubling the size of trades using leverage. Some beginners may wonder: Is speculation profitable? In short, stock speculation is a profitable investment, but it is fraught with risks. The speculator is a trader who does not care about the real market value of assets, but rather his only concern is tracking price movements and snatching profitable deals during short-term fluctuations. For example, most investors in the stock market do not care about monitoring market movement because their goal is to hedge and benefit from the annual dividend distribution, unlike speculators who follow the market and indicators on a daily basis in search of opportunities.

The most important steps and strategies for success when speculating in stocks

Now we will discuss the most important steps that must be followed to succeed when speculating in the stock market, which will help you make a difference during your first months of trading.

Full time

Many beginners believe that the speculative business model is easy to reap profits in the stock market, and this thinking pattern is mainly responsible for their achieving disastrous results. Success as a speculator requires complete dedication, so you should start your day early in the morning with reading the latest economic news, market updates and reviewing the previous day’s notes. For example, you should not start trading until you investigate the latest acquisition deals, mergers, or any profit distribution process, as all of these factors affect stock prices.

Investing in liquid stocks

Success in speculation requires trading in liquid stocks with large capitalizations, while avoiding medium and small caps. This ensures deep liquidity over time because most investors tend to bet and invest in large companies, thus fluctuating price movements ideal for speculators. It is also necessary to check the amount of liquidity according to the different price levels. Most stocks are highly liquid at a lower price level and decrease when a certain price point is reached. Understanding these price fluctuations allows you to enter into profitable trades faster, and also ensures that you end the trading session with a good profit margin. If you intend to enter the stock market, I advise you to invest with a reliable brokerage company Exness Which allows opening Islamic trading accounts without usurious interest while adopting a professional and easy-to-use trading chart. It is also characterized by a high level of liquidity throughout the day with competitive commissions, thus ensuring the speed of executing trades while achieving the planned profit margin. For more information, you can read our previous article that we dedicated to Explanation and evaluation of Exness In all impartiality, it reviews the advantages and disadvantages of trading on the Exness platform.

Move with the market trend

Moving with the market is always beneficial and profitable when speculating, and the controlling factor remains the ability to ride the wave of promising stocks during the session. For example, you must follow the news related to the stock and the parent company’s field of operation on a daily basis, as any indicators that appear will directly affect the price movement significantly. Also remember that you are speculating and not investing, so any favorable opportunity should be exploited as quickly as possible. This step also applies to speculation in the foreign exchange market, which opens in Japan in the east and closes in the American stock market in the west, which gives a margin for achieving good returns. If you want to invest in the foreign exchange market, you can browse this guide about… The best reliable and licensed Forex trading companies From financial bodies.

Learn technical analysis

I would like to remind you that technical analysis is an art, not a science, so it is difficult to find a recipe or business plan that suits all stocks. This does not prevent the existence of a common rule for technical analysis, which is studying the stock price archive and comparing it to trading volumes. Analyzing this data will enable you to understand the nature of the stock’s volatility, and will also provide clear indications of the extent to which the whales of the market control it. It is true that having a chart helps predict future price trends, but there are external factors that influence the trend more than the expectations of chart tools. Personally I recommend using TradingView tool For technical analysis because it is professional and has advanced tools compared to other competing tools.

Learn to speculate in stocks

Commitment to stop loss

Speculating is based on taking advantage of price differences and achieving small profits faster, so you should avoid losing by a large margin. Any trader who does not use Stop Loss orders is an amateur or reckless person, because activating Stop Loss orders is an intuition when trading in every… Financial markets. For information, the most important factor controlling the speed of execution of stop-loss orders is the credibility of the trading platform, especially since some trading companies manipulate the charts and orders. In general, non-compliance with stop-loss orders is considered one of the most common Common mistakes when investing in the stock marketTherefore, it must be activated before the start of the trading session. Define a specific profit range for yourself, thus controlling the level of price fluctuation that is acceptable and appropriate for your adopted strategy.

The most prominent questions about stock speculation for beginners

This paragraph is dedicated to answering the most prominent questions about the technical aspects of stock speculation, which we will answer briefly.

How do you choose the right stock for speculation?

Speculative stocks are characterized by their low value because they do not have indicators of strength or represent a sustainable business model, so they derive their strength only from the hope of speculators that their value will rise in the future. In general, you can choose the appropriate stock for speculation or short-term investment by following the following steps:

  • Invest only in liquid stocks.
  • Stay away from volatile stocks.
  • Trade well-correlated stocks.

What is the best time to speculate in stocks?

The best time to speculate in the stock market is a full hour after the market opens, so you should avoid opening trades at 10 am. Also, all trades must be closed one or two hours before the end of the daily trading session, because price movement and indicators change significantly before the market closes.

What are the best US stocks to speculate on?

Statistics indicate that the American Stock Exchange is the largest in the world in terms of trading capital and the number of companies listed on the stock exchange, and thus it is considered the first destination for emerging and promising companies to raise funds. This provides short-term investors with good opportunities for profit, so we have compiled a list of the best American stocks for speculation that are known for intense trading activity.

  • Materion Corp (MTRN)
  • Magente (MGNI)
  • Lithium Americas (LAC)
  • Sunrun (RUN)
  • Murphy USA (MUSA)
  • Allegro MicroSystems (ALGM)
  • iCAD (ICAD)
  • STEM

What are the best Saudi stocks for speculation?

The Saudi Stock Exchange is small in size and has backward laws compared to its American counterpart, so it is not attractive to emerging companies, which are considered suitable for speculators. This factor is stable until it changes, God willing, with the completion of the 2030 Economic Vision, but there are opportunities to achieve some good returns despite all the circumstances. The ideal stocks for speculation in the Saudi market are blue-chip stocks, which represent major companies that possess large capital and control vital economic areas. Leading stocks are ideal for speculation because they lead the market during the rise or fall, and therefore the best Saudi stocks for speculation can be summarized in the following list:

  • Saudi National Shipping Company (Bahri)
  • Al Rajhi Company (RJHI)
  • Saudi Telecom Company (STC)

Is speculation in the stock market halal or haram?

Speculation in the stock market is permissible because it is not gambling according to the Sharia classification. The decision to invest or not is not made according to desire, but rather based on studying the stock performance archive and the latest indicators. The only warning is that speculation in the stock market is an investment with high profits and risks at the same time, so the feasibility and appropriate timing of entering the market must be carefully studied.


It is common knowledge that speculation (Speculation) In the stock market, which is financially high and mentally uncomfortable, the most difficult task facing traders is to maintain vigilance and follow the market. Some may praise the automatic activation of stop-loss or buy orders, but they are not sufficient to confront the advanced algorithms of trading companies and the problems associated with poor Internet throughput. Also, the requirements for profit from speculation are only suitable for large traders and investment funds, as achieving good results requires entering the market with a large capital. According to my long experience, I believe that stock speculation is a good way to gauge the pulse of the market and achieve small gains, but it is not a successful investment in the long term. Also, to educate yourself, we invite you to read this important article about The most expensive and strongest currencies in the worldWhich will show you that the rise in the value of the currency is evidence of the weakness of the economy and not its strength as expected. Now it is your turn to contribute to enlightening traders by sharing the article. We are also ready to answer all your questions in the comments section below.

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