Virtually every single forex broker or brokerage offers a free forex trading simulator that will teach you how to trade, and how to use the trading software, without risking real money. There is no better way to learn the foreign exchange market than to use a free forex trading simulator, as they do not require the use of real money to actively trade currencies.
Free Forex Trading Simulator
The most popular free forex trading simulator is one which is produced by forex company Oanda. The company, one of the few no-minimum brokers worth your business, also has one of the easiest to use platforms. No software is required to use their free practice accounts, also known as demo accounts, and their data is acquired directly from market makers.
Oanda’s free simulator is powered by real-time data from the foreign exchange market, meaning that a profit or loss in a simulator is the same as if you were using real money. Of course, any trades you place in a simulator are made with fake money, but the actual changes in currency values do correspond with market movements in the simulator.
Why Use a Forex Simulator
Unfortunately, nearly 95% of all traders who trade real money in the currency markets fail within a year. Usually, this is the result of poor trading form but can also be due to other factors including not enough time with a free forex simulator. You would try flying a plane, or doing a brain surgery without studying up, so why would you start trading real money without any understanding of the forex market?
There are few opportunities in life to learn by doing, and even fewer opportunities that let you learn for free. If you’re not using a free forex trading simulator to learn to trade then you’re either throwing your money away for a paid simulator, or you’re sure to watch your account balance dwindle thanks to your inability to learn, or both. If only for the safety of your money, please spend the time to practice your trading abilities with a free simulator–we’re sure you’ll be glad you did!
Reasons to Avoid Forex Simulators
Forex trading simulators can be deceiving as much as they are helpful. A minute difference in terminology often makes the difference between the best forex simulators, and the worst.
Trading simulators can use both real-time, accurate forex data derived from the foreign exchange market, or data that is simulated. Simulated data–forex feeds that are made up–will not make you a better trader, as you’re testing your abilities against a fake market feed.
On the other hand, demo accounts almost always use real market data. When deciding which trading simulator to use, opt for a demo account that uses a real data feed. All MetaTrader 4 platforms use real data from broker servers, and thus your simulated trades are actually measured against changes in the real forex market.
