The Speculators
Speculation makes most of those who are not professional traders only lose money by doing the activity, while the traders who actually do make money will tend to become the professional traders in the end, occasionally however there are some dramatic situations that will happen like the Hunt brothers' efforts of cornering the market of silver as well as the speculations by George Soros and the trading by speculation by Nick Leeson, which inevitably caused the Barings Bank to collapse.
There are some definitions, that define most of the investors investing in the long term that even the investors who purchase and hold their buys for years and decades, may also be categorized as speculators with the exceptions of a few and rare who aren't firstly interested and motivated. Those are exceptions to this definition eventually sell at profit they would consider a good profit. Some of the most dedicated speculators is also characterized by the holding time. They hold for a shorter time, they use leverage, by having the will to hold positions that are and the long positions as well, in the markets, where they deem that such a distinction could be made reasonably. There is always a speculation activity that exists to a certain degree in a range, very wide which could vary from buying a house to betting on horse races, this is referred to as Ubiquitous Speculation which most of the modern economists in the market call.
The economic benefits of speculation
Speculators also provide service to a certain market which is firstly given by having their own capital at risk in hoping for a better profit, speculators could add liquidity to the existing market for the others to have it easier to offset the risk, which includes the investors who are categorized as arbitrageurs and hedgers.
Let's take the for a certain market - say with the pork bellies - which have no speculators and only pig farmers who represents as the producers and the consumers like housewives, butchers ,etc would also participate in the foreign exchange market. If the market has fewer participants, a larger spread would be created between the existing bidding price and asking price of the pork bellies and a new participant who enters the market and who desires to buy or sell some pork bellies will then have to accept the market.
The prices will have a larger bidding and asking spread and an investor may even find it hard to look for another party to purchase or sell it to. In this case a speculator could exploit any difference in the large spread while competing with the other speculators thus reducing the spread and give a more market described by its efficiency.