Best Forex Simulator Software Types to Improve Your Trading

Many beginner traders prefer to have some practice, before moving on to real-time trading. Therefore, we have brokerage companies that provide their clients with a Forex simulator free of any charge. This helps traders to learn from their mistakes and sharpen their trading skills without taking any financial risks.
One of the most widespread free Forex simulators is demo accounts. Here, traders are given virtual money to trade. In most cases, market participants receive $10,000 or some other specified amount. Some platforms even permit traders to reset their balance at the original level, if they lose their virtual trading money. So here, market participants can keep track of their trading performance and check whether they are ready to move on to real trading accounts.
Some trading platforms like MetaTrader 4 and MetaTrader 5 allow traders to use the strategy tester tool as well, which can be very handy for stimulating trade.
Finally, in addition to demo accounts, some brokerage companies also offer their clients an FX simulator. Here traders can learn to trade, take control of time, and gain more experience in trading without risking any amount of money.

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Free Forex Trading Simulator Software Explained

At this stage, some people might wonder why traders should consider using the trade simulators, before moving on to real-time trading. Well, here is worth mentioning that those types of simulators have some notable benefits, such as

  • Demo accounts and other trading simulators, which allow traders to gather necessary experience and learn from their mistakes for free. They might also achieve this by starting on real accounts. However, the problem here would be that most likely a trader will lose a significant amount of money before he or she will be in a position to avoid making the most common mistakes.
  • Trade simulators help market participants to keep their emotions under control. Since there is no financial risk involved, traders are more likely to make rational decisions. This can certainly help market participants master the emotional intelligence and disciplined approach, which is so important for building a successful trading career.
  • Demo accounts, as well as other types of trading simulators, allow traders to test their strategies. Over time the market participants can get accustomed to the usage of different technical and fundamental indicators and determine which one works best for them.
  • Those types of accounts also give traders an opportunity to keep track of their progress and have realistic expectations about the possible gains and losses in the Forex market. Once a trader reaches a stage where he or she is making some steady gains, then it might be time to open a real account and earn some real payouts in the process.
  • Finally, it is worth noting that traders can get all those benefits for free. Many Forex education programs cost hundreds of dollars. So instead of spending a considerable amount of money on trading education, market participants can learn for free from Forex simulator programs and instead invest their savings on real trading accounts.

Is Demo Account the Best Trading Simulator?

One very straightforward option for Forex traders, looking for some practice, is to open a demo account. Here the brokerage company provides its client with virtual money to trade. Many brokers give traders a virtual $10,000 for this purpose, however, there are some others who prefer other amounts. Some brokerage companies also allow traders to reset their balance in case they lose their trading amount. In fact, with some brokers traders can reset their balance indefinitely at any point in time.
One of the biggest advantages of using demo accounts is that it takes emotions out of the equation. When a trader knows that there is no financial risk involved, then he or she is more likely to avoid making decisions, based on emotions. Instead, traders are more likely to maintain their rationality. After some time of practice, this becomes a habit. Therefore, once traders move on to real trading accounts, they are much more likely to have enough experience to maintain a disciplined approach to Forex trading.
The second major benefit of using a demo account is the fact that it helps traders to keep track of their trading performance. As a result, market participants can determine what will be the realistic monthly goal based on their past results. For example, if a trader uses a demo account for 3 months, then he or she can work out the average earnings per month and set their goal at or slightly below this level.
Finally, demo accounts give traders the opportunity to test their Forex strategies in real-time trading. This could help market participants to sort out which techniques work best for them and also eliminate those that do not produce desired results. At the same time, it gives traders an opportunity to experiment with different trading styles and choose the one which they are most comfortable with.
To illustrate some examples of those types of experiments, let us take a look at this 5-minute USD/JPY chart:
 usd jpy example
Forex trading simulator 2020
As we can see from the above image, the pair was trading at 107.60 level during July 8, 2020. After a couple of hours of trading, the dollar has dropped down to 105.50 level. At this stage, there was a long red candle in the chart, followed by the hooting start. A trader might have decided that this was a very bearish sign for the pair and opened a short USD/JPY position.

However, as we can see from the above the profitability of this trade heavily depended on the trading style of an individual. For example, if a market participant followed the scalping strategy, then he or she would have ended up with some losses. The reason for this is that the red shooting star candle was followed by a series of green candles, lifting up the currency pair to 107.56 level.

On the other hand, more patient traders might have made some gains. This is because, after this initial move, the USD/JPY pair settled for some consolidation. After more than 3 hours of trading, the dollar began its slide. It began with yet another shooting star candle, followed by 2 long red ones, taking the pair all the way down to 107.42 level. So at this stage, traders could have closed the short USD/JPY position with some gains. The future price developments have shown that this would have been a worthy decision because after this point the pair has recovered and risen to 107.53 mark.
Here it is worth mentioning that there was another good reason not to hold a short USD/JPY position overnight. The interest rate differentials here are in favor of the US dollar. The US Federal Reserve keeps rates within 0% to 0.25% range. On the other hand, the Bank of Japan’s rates are at -0.1%. Therefore, for holding a short USD/JPY position, a trader would be charged with rollover fees.
So as we can see just by engaging in one trader for some time, a beginner trader would have learned several valuable lessons:
  • In general, everything else being equal, a shooting star candle can be a bearish sign. However, this does not mean that the market will fall right after this candle. Currency pairs often experience pullbacks and bounces, so it is essential to have stop-loss or trailing loss orders to guard against those setbacks.
  • Unless a trader is engaged in a scalping strategy, in a case of the market moving by 5 to 10 pips against their position does not mean that they have to close their trades. Depending on the technical and fundamental factors, the market can change its direction and turn the losing position into winning trade.
  • Before deciding to keep the position open overnight, it will be very helpful for traders to analyze the interest rate differentials between two currencies, which make up the given currency pair. Here it is worth keeping in mind that if market participants buy lower-yielding currency against the higher-yielding currency, then they will be liable for daily rollover charges, as long as the position remains open.
Obviously, traders would have learned those lessons from real trading accounts as well. However, with demo accounts, market participants can gain this valuable knowledge without taking on any financial risks, which is a very significant advantage of those types of accounts.
When it comes to choosing a free demo account, there are plenty of options available. For example, after filling out a small registration form, traders can get a risk-free Axiory Demo Account free of any charges and without any expiration date.

Advantages of Using Forex Simulator App

At this point, it is worth mentioning that despite all of the advantages and benefits of using demo accounts, they are not the only trading simulators available online. Some Forex brokerage companies, like Axiory, are offering their clients so-called ‘FX-simulators’. Now those might sound very similar to demo accounts, however, there are a number of differences between them, such as:
  • One of the biggest advantages of using such Forex simulator software is the fact that unlike the demo accounts, it provides traders with a time travel option. So here essentially, market participants might choose a point where the market made some major moves and start trading during this period. Therefore, traders can measure how well they would have performed in highly volatile conditions.
  • Those types of trading simulators have several years worth of historical data attached to them, down to tick movements. With demo accounts, traders can find some weekly or monthly charts, going back several years. However, when it comes to 1-minute or 5-minute charts, they do not tend to go back for more than a couple of weeks. Therefore, this makes trading simulator software much more useful for testing trading strategies, based on past performance.
  • Time control option allows market participants to fast forward time, after opening one or several positions. With demo accounts, traders sometimes might have to wait for hours or even days before they could see the results of their efforts. On the other hand, with those types of simulator accounts, market participants can see whether their strategy was profitable or not in a matter of minutes. This can certainly allow traders to gather a considerable amount of experience in a rather short period of time.
  • Finally, Forex simulator accounts can be very useful for regular carry traders. Due to constantly changing interest rates and considerable market movements, sometimes it is difficult to backtest some carry trading ideas. However, with those types of accounts, traders will be able to calculate the exact amount of revenue they would have earned from past carry trading with different currency pairs. This sort of information can be very handy for the future decision-making process.

Use of Forex Simulator Game with Different Currency Pairs

One of the downsides of only limiting trading to demo accounts is the fact that at that given moment there can be very little movement in the market and it might take several months before traders could gain enough experience to be ready to start trading with real money.
Fortunately, traders make use of the Forex trading simulator free of charge to address those imperfections and gain necessary knowledge much faster than before. To illustrate the practical benefits of using Forex trading simulator for windows and other platforms, let us take a look at this daily GBP/USD chart:
gbp usd example
Forex trading simulator online
So, if traders have opened this chart from demo trading accounts, they would only have a chance to open positions from the point, represented by the end of this diagram. At that time, the GBP/USD was trading at $1.2549 and, after some major fluctuations, settled for some ranged trading. This might be a good environment for scalpers, for traders with longer-term trading styles, it is difficult to find some potentially lucrative entry point in the market.
Therefore, those market participants want to test their trading skills in a more volatile market environment, they have to wait for an interest rate decision, some major economic announcement, or other important events, to make the pair more volatile. This might not happen for days or even weeks.
With a Forex trading simulator online traders can use a time control tool and go back to for example August 2019, when the GBP/USD pair was much more volatile than now and had more trading opportunities. As we can see from this chart by that time, the pound was trading close to $1.21 level. Despite the two notable pullbacks, the British currency has risen steadily for the next subsequent months of trading, eventually reaching a peak at $1.35 level during early December 2019. So this long move gave some longer term traders a chance to earn up payouts worth up to 1,400 pips.

Despite this show of strength, it began its slide, before the end of December. However, this downward trend was moving very slowly. Yet, the pair did collapse during March 2020, as the panic selling started to dominate the market, eventually dropping all the way down to $1.14 level. However, from late March, the pound started to recover, regained some of the recent losses during the following months, and by July 2020 traders were close to $1.26 level.
So as we can see from this example, the pair experienced a great deal of volatility during the last 10 months. This gave plenty of opportunities to market participants to earn some decent returns during this period. Therefore traders can use a Forex trading simulator for mac or windows, any platform they are comfortable with, and test their skills in the past. Unfortunately, it is worth mentioning that so far we can not find Forex trading simulator android or ios users might make use of.
In fact, in order to go through this period, illustrated in this GBP/USD chart, market participants do not have to spend 10 full months to complete this experiment. Here what they can do is to open positions and then fast forward to the desired point in time, using a time controller tool. In this way, instead of waiting for months, traders can get all the necessary results of those experiments in a single day.
Now here it is worth mentioning that when it comes to those types of software, traders are not strictly limited to trading only currency pairs or only using traditional candlestick charts.
Here traders can also test their skills in trading commodities and use other types of charts. To illustrate the benefits of those features,  we can take a look at this daily gold price Heiken Ashi chart:
Best Forex simulator software of 2020.
heiken ashi candle example
As we can see from this diagram, trend analysis with Heiken Ashi is much easier, then with the traditional candlestick chart. Here we can see that since the beginning of 2020, the gold price has gone through 3 main stages. From January until early March, the price of this precious metal has risen steadily, eventually reaching $1,680 level in the process.
The subsequent stock market crash of March 2020, also had negative effects on commodity prices as well. As the panic selling spread across the market, the gold price dropped all the way down to $1,475 level.
This decline, however, turned out to be very short-lived. From late March, the price of this precious commodity has made some consistent gains, eventually rising to all the way up to $1,802 during the first half of July 2020.
So as we can see from this example, the gold prices can be even more volatile than some currency pairs. Therefore the fact that Forex trading simulator free download is widely available online, helps traders to gain valuable experience from trading this volatile commodity, without paying any fees.
This also gives market participants opportunities to test the Forex correlations strategies with the help of those types of software. For example, traders could find out how they would have performed if they tried to predict the movements of the Australian dollar, by the latest changes in the silver price. Or alternatively, how much payouts would they have earned if they had traded the Canadian dollar against its peers in accordance with oil price movements. In this way, they can experiment with dozens of strategies.
Forex simulator free download is available at the websites of several brokerage companies. For example, one of the best forex simulator software of 2020 is Axiory Forex Simulator. It allows traders to access all of the features of the software, we have described above and taken their trading experience to a new level.

Forex trading simulators for mobile platforms

While most of the simulation software is available for desktop users, there are still a few choices for mobile traders. The amount of FX simulation software is extremely limited for mobile devices, for Android, iOS, and HarmonyOS. This is the case as it is much more comfortable to simulate trading on desktop platforms. However, if anyone is wondering about the list of software for mobile, here are some of them:

Forex Tutorials

Forex Tutorials is a real quotes trading simulator that not only offers an entertaining game-like approach to financial trading but also ensures beginners can gain valuable lessons and experiences. The app can be used to learn how to trade the Foreign exchange markets, test trading strategies on live quotes, and access educational materials. The simulator allows users to execute deals in the simulator software like it was on live markets. Traders can also compete with other traders and see the performance of top traders. 

The app is 100% free and provides all the educational resources for free. The app is targeted mostly at beginners who want to test how the markets work and what it's like to trade in live financial markets. Traders do not even need to register, unlike demo accounts and live trading accounts. The app currently has a 4.8 score and over 62k votes in total. 

Forex Game Trading 4 Beginners

This app is rated with a 4.8 score on Google Play Store, it is also free. Forex Game Trading 4 beginners offer a simulation environment for trading cryptos, Forex pairs, and even stocks. Similar to Forex Tutorials, this app also offers everything for free and allows traders to experience real market quotes in a simulated environment without risking their money. It is similar to a demo account but with much less hassle for registration and other procedures. 

While there are more apps for mobile devices, these two come out at the top with popularity and rankings. 

The importance of the transition to live trading

Simulator software and a demo account are the two most important steps for becoming a successful financial trader in any of the markets. However, it is as important to switch to live trading on a real account with real money. This is critical as some beginners tend to elongate this process. Now, trading on a live account is emotionally entirely different from trading on a demo account. The only difference between these accounts is the live account requires traders to risk real money which is affecting traders differently. Trading psychology is very important for switching to a live trading account. To truly experience what trading is like, a live account is the only option. However, there are steps even during the live trading:

  • Start small and grow slowly — It is imperative to develop a risk tolerance for increasing lots. Starting with large lot sizes will place a heavy emotional toll on a trader which never is a good thing. 
  • Slowly increase the lot size — It is never good to hurry and increase the lot size right after the first profitable trade. The number one reason for traders blowing up their accounts is not the losing trades but the winning trades. Consecutive winning trades put traders in the zone, making them feel invincible and this is where they are susceptible to increasing their lot size subjectively. As a result, the losses are larger with larger lots. 
  • Manage risks accordingly — Always use stop-loss even for strategies where manual trade closure is the rule. This is to ensure the trade always closes when losses are too high.

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Best Forex Trading Simulator Software - Key Takeaways

  • Many Forex brokerage companies offer traders demo and other MetaTrader simulator accounts for free. This allows market participants to learn about their mistakes for free, keep track of their performance, and test their strategies without risking any amount of money.
  • The demo accounts provide traders with virtual Forex trading capital to exchange currencies in real-time market conditions. The trader has to pay for spreads and rollover charges, just like on real accounts. Some brokers also allow traders to reset their account balance indefinitely if they lose all of their virtual money.
  • Forex simulator software differs from the demo account in a sense that it allows traders to take control of time. Those applications store several years’ worth of data. This allows traders to travel back and forth in time and test their strategies on past price action and gather some valuable experience in the process.

FAQ: Forex Trading Simulators

When traders should consider moving to real accounts?

Despite all of the uses and potential benefits of demo and Forex simulator accounts, the main point of those tools is to prepare traders to eventually move on to real trading accounts. However, identifying the point at which one is ready to start trading with real money is difficult for some traders.
One obvious logical criteria for this would be that traders should end at least one month with some net gains. This can be an important sign of the fact that a trader might be in a position to earn some real payouts with Forex trading. On the other hand, if a market participant still operates at monthly losses with a demo account, it might not be the best idea to move on to real accounts yet.
The second important thing to achieve before starting trading for real, a trader needs to identify his or her favorite strategies, which worked well with demo accounts. This can be very handy since traders can stick to those techniques they are most comfortable with and potentially increase the percentage of winning trades.
Finally, market participants need to have some specific goal for monthly payouts, the equivalent of which they already have achieved with demo accounts. This is quite logical, for example, if a trader only earned $500 per month while practicing, it would not be very realistic to set the goal of earning $2000 per month in a real trading account.
After achieving all of those milestones we described above, traders might consider starting trading with real money. For the purpose of maintaining control over emotions, market participants might start trading with small sums of money and later increase the amount of capital as they gather more experience.

How can traders utilize trading simulator software for the purpose of planning their carry trade strategies?

Forex trading simulator software can be very useful for the planning and execution of carry trades in real trading accounts. This can involve several stages. Firstly, traders can take a look at the interest rates of different central banks. Then they can group together several currency pairs, composing those with one high and one low-yielding currency.
After having at least 3 or more currency pairs, traders can use a time control mechanism of the software to go back in time, for example, 1 year ago and those carry trades. The market participants can then fast forward to today and check several things.
Firstly, it is important to compare the actual amount of interest the trader has earned during the year with each currency pair. Secondly, traders can compare the changes in the exchange rates, and find out whether they have added to or subtracted from the rollover earnings.

Therefore, traders can compare the performance of carry trades with different currency pairs and make real-time trading decisions accordingly. Obviously, past market data can not guarantee future performance, however, it can still provide traders with valuable guidance on choosing pairs for carry trades.

Does the demo accounts have any advantages over the Forex simulator software?

Despite all of the uses and advantages of Forex simulator online accounts, for the sake of accuracy, it is worth mentioning that demo accounts are much closer to the real-time trading conditions.
With the real trading account, traders do not have a time control option, they can not trade past market movements, nor can they fast forward through time. Therefore, demo accounts do a better job of simulating real trading accounts and can be a valuable practicing tool for beginners.

Is there any risk associated with the use of demo or Forex simulator accounts?

In general, there is no financial risk involved with free demo or Forex simulator accounts. However, with the paid ones there is always a concern that a trader might not like the platform, or not decide to move on to trading, therefore paying those fees for no good reason.
With some brokers there also might be a problem, that in demo accounts they might apply lower spreads than in demo accounts. Therefore, as a result, they might overestimate their performance on practicing accounts and be disappointed when they move on to real trading accounts.
However, it is worth mentioning that highly reputable Forex brokers typically do not have those types of problems. This is because most of them use the same spreads in demo accounts as in real ones.

Can traders use Forex simulator software offline?

Some Forex trading simulators are designed in a way to work even in an offline environment. The only downside to this is the fact that in this case trader only has historical data to work with. The computer will not be able to update the platform with real-time rates until the trader restores connectivity to the internet.
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