Best Trading Simulator: Free Stock Market and FX Simulator
To be a successful trader, you must be able to analyze the market and stick to a consistent trading strategy. But where to begin? And how can you put your strategies to the test before risking real money? Trading simulators play this role.
Whether you're trading Forex, stocks, commodities, or cryptocurrencies, practice is essential. And the best way to begin practicing market trading is with a Forex simulator. In this article, we will look at what a trading simulator is, its benefits, a comparison of the various types of simulators, as well as how to choose the best simulator software, and more. Let's take a closer look!
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We've all heard that practice makes perfect and that it takes 10,000 hours to master a skill. Trading is no different, and the number of hours invested by a trader is what separates Forex beginners from trading professionals. As a result, practice is more important than theoretical knowledge. The good news is that an online stock market simulator can assist you in accomplishing this.
You don't want to risk your funds while practicing however, so using a simulation software on a demo account allows you to learn the ropes without suffering any losses.
Trading Simulator: An Introduction
A Forex or stock market simulator is a piece of software that "simulates" real market conditions. This allows traders to trade and practice their strategies with virtual money before testing their skills on the live market.
Some simulators use a simple algorithm to mimic broader market activity, while others are trading platforms that reflect live market data, which offer a far more realistic market experience.
While both can be useful, the latter provides much greater value.
The key features of Forex simulators are:
- Live simulation and market updates
- Risk-free demo account trading
- Inclusion of all trading features and functions
- The ability to test any Forex strategy
Most stock market simulators offer a virtual balance of anywhere up to 100,000 euros. From there, traders can trade on a range of financial markets, including stocks, bonds, Forex, commodities, indices and cryptocurrencies.
Often, simulators are named after the instrument they allow you to trade, such as stock market simulators (stocks), Forex simulators (Forex), binary trading simulators (binary options), and so on.
Other companies might name their simulators after the device being used:
- PC Trading Simulator
- iOS Trading Simulator
- Trading simulation for MAC
- Trading Simulation for Android
As a result, rather than focusing on the name, it is preferable to focus on the functionality of any trading simulator.
Any trading simulator should have the same functionality as a live trading account, including the ability to open, modify, and close trades. This includes commissions, spreads, swaps, and other fees that would be charged on a live account. Stock market fees can have a significant impact on return on investment, so they must be included in any free trade simulation account.
To start trading on one of the world's most popular free Forex simulators, click the banner below to open a demo account with Admirals!
Trading Simulators vs. Simulation Platforms
With so many labels floating around, it can be difficult to know what you're signing up for. In particular, it's easy to confuse demo accounts, which are simulators within a trading platform, with pure simulation platforms.
Here's a quick overview of the differences:
- Demo accounts are essential when you want to start operating in real markets, but first you want to practice your new knowledge or strategies. If your strategy is a success in your demo account, it does not guarantee that it will be in a live account, since market conditions are always changing.
- Simulation platforms simulate the experience of other traders. The goal is for the user to learn from traders as they overcomes the different levels and challenges that each level entails.
In this article, we will focus predominantly on demo accounts.
Trading Simulators: Advantages and Disadvantages
To find the best trading simulator on the market, it's important to know the advantages and disadvantages of using one.
Some of the advantages include:
- Learning how to use the trading platform, and avoid common mistakes like placing orders by accident
- Testing trading strategies without putting real money at risk - if a strategy fails in a demo trading account, you haven't lost anything. If it works, you have a strategy you can use for live trading.
- A real-time stock market simulator allows you to better understand the financial markets and the instruments in which you want to invest.
- A trading simulator also allows you to test automated trading software, before trusting your hard-earned money to an automated system.
The main disadvantage of using a free trading simulator is that it can never replace real-world trading experience. A variety of factors will influence your investment decisions when trading with real money:
- Your risk tolerance and investor profile
- Your initial capital
- Your investment horizon
- Taxation in your country
- The stress of having real money at risk
- Risk management and money management strategies
This leads traders (especially new traders) to make different decisions to what they would make if they were trading the live markets. For example, we have found that in free trading contests, traders take disproportionate risks to obtain the best performance and win the prize.
Stock market simulators or demo accounts should not be used for this purpose, but to test investment strategies and new instruments.
Choosing the Best Forex Trading Simulator
If you're ready to try a trading simulator to start practicing trading Forex or the stock market, there are a number of things to consider when choosing the best simulator software for you.
1. Does the simulator mirror the real market environment?
The ideal platform for learning how to trade Forex and stocks online should provide market data so that you can see market fluctuations.
You can see how long trading possibilities exist with real-time data - if you are an intraday trader, you can see the difference that leaving a position open for an extra day or two will make. If you're a day trader or scalper, you can see how a few hours or even minutes can make a big difference.
In a trading simulator, you can also see how a particular trade would have performed in a real account, because the price movements in the simulator software are identical to those in the market - the only difference is that you are trading with virtual money.
Simply put, trading with live market data is the only way for you to progress and learn to trade. Otherwise, your trading decisions won't be based on how the live market behaves, and you could put in a lot of practice without improving your trading skills.
2. Does the simulator have a flexible deposit amount?
Many free trading simulators offer virtual deposits up to EUR 100,000. While this might sound like a great opportunity to get a lot of trading practice, the truth is that unless you are planning to deposit those amounts in a live account, you won't be simulating real trading conditions.
Consider this: if you have EUR 100,000 on a demo account, you can make a lot of losing trades and still have plenty of virtual money to practice with. If you then open a live account with a deposit of EUR 1,000, you must manage that money much differently because you have less to lose.
Unfortunately, because you were practicing with a much larger account balance, you would not have learned risk management, money management, and trading strategies appropriate for the smaller balance in your live account.
3. Which tools and features come with the simulator software?
There is a range of stock and Forex trading simulators available, and many of them offer very different features and functionality. If you focus on the simplest or most basic platform, you might need to upgrade later due to missing features.
In other words, it's better to choose the more advanced and encompassing platform, to have a good foundation for your future trading.
This is why starting out with an advanced platform, like MetaTrader Supreme Edition might save you time in the long run. However, an advanced free trading platform is only really necessary if you plan to become an intraday forex trader.
If you are a long-term trader and do not require detailed analysis every day, you may need to choose a platform that is the most accessible for you.
Nevertheless, your simple platform should always provide you with real-time currency rates, and other additional features necessary for you to be successful in long-term trading.
One specific feature to look for when comparing stock market simulators is the option to manually test your trading strategies based on historical data - this is known as backtesting.
The benefit of this approach is that you can find certain market events to test certain trading strategies, rather than waiting for a similar event to occur in real time and losing valuable practice time.
So make sure to go out and find popular strategies and try them out. You never know how effective these strategies will be until you try them.
If you're looking for more strategies and helpful advice, feel free to tune into our free webinars on trading, by clicking on the banner below:
4. Is the simulator provided by a reputable Forex broker?
Most stock market simulators and trading simulation software is offered by online brokers. For this reason, it's important to make sure the broker you are choosing is trustworthy, as this will likely be your platform choice once you have gained enough experience on a demo account.
Online brokers are diverse and offer different platforms, different available instruments, different trading costs and different support.
Some of the things to consider when choosing a broker include:
- Are they regulated?
- Do they segregate client funds?
- What range of instruments do they offer? Just Forex? Just stocks? Or a mix?
- What trading platform and tools do they offer?
- What is the cost of trading?
- Do they have local customer service? How can you contact them?
Learn more about choosing a good broker here.
MetaTrader Trading Options
Now that you know what a Forex trading simulator is, the benefits of using one and what to look for, you might be wondering which trading simulator we recommend.
At Admirals, we think the MetaTrader trading platform - a professional trading software - is one of the best trading simulators available. It's also the world's most popular trading platform, with a large support community, and the most advanced functionality for Forex and CFD trading online, which makes it the best option for someone who wants to start trading online with a free online trading simulator.
Just some of the functions of MetaTrader, and MetaTrader's demo account, include:
- You can access thousands of the world's financial markets - including Forex, stocks, indices, commodities, cryptocurrencies and more - through a single platform.
- You have the option to trade long (meaning you think the price of an investment will increase) or short (meaning you think the price of an investment will decrease).
- Because MetaTrader is one of the world's most popular platforms, there is a lot of support available online, including forums, as well as an online marketplace with tools to boost your trading.
- Many instruments are available in microlots, meaning you can make smaller trades as you learn the ropes.
- All charts are populated with live market data, with prices shared in real time, and can be marked up with a range of indicators, trendlines and notes.
- This MetaTrader platforms allows you to do ultra-short-term trading (scalping) through one-click trading.
- The standard platform includes more than 50 technical indicators for detailed analysis.
In addition, Admirals also offers the exclusive MetaTrader Supreme Edition, which is free for all Admirals traders. MTSE includes a range of advanced features to help clients achieve the best trading results, including:
- Advanced technical analysis tools and featured trading ideas, provided by Trading Central,
- Extensive indicator package with over 16 indicators to enhance clients' trading,
- Global opinion widget to help clients evaluate market sentiment,
- Mini Terminal and Trade Terminal widgets to make trade management more efficient than ever before,
- Tick Chart Trader to make it easier for clients to track their chart movements and find the best entry or exit point,
- Real-time market news so clients never miss a trading opportunity,
- Trading simulator so clients can try out new trading strategies, and
- Mini charts, which allow clients to see multiple time frames and chart types at a time.
If you're looking for what to trade next, feel free to check out the thousands of Stocks and ETF's offered here at Admirals:
How to Download the MT4 and MT5 Free Simulator
To access the MetaTrader simulator (available for both MetaTrader 4 and MetaTrader 5), take the steps below:
Here are the steps to follow:
- Open a demo account here.
- Check your email for your trading account details.
- Download the MetaTrader trading platform (we recommend MT5 for a wider range of financial markets) and install it on your computer.
- Open MetaTrader on your computer, and enter the demo trading account details from your email.
How to Download MetaTrader Supreme Edition
While having a MetaTrader demo account is all you need to start trading simulations, there are some additional features in MetaTrader Supreme Edition that can be helpful for more advanced simulations.
To download and install MetaTrader Supreme Edition, follow these steps:
- If MetaTrader is already open on your computer, close it.
- Download MTSE here.
- Run the installation file.
- Open MetaTrader, and you will see the advanced features in the Navigator window, under Indicators and Expert Advisors.
Forex Simulator: Step by Step Guide
MetaTrader Supreme Edition comes with two useful Forex and stock market simulators - one is the trading strategy tester, which allows you to test different trading strategies against historical price data. The second is the day trading simulator, which specifically tests day trading strategies.
Trading strategy tester
The strategy tester in MetaTrader Supreme edition is our best CFD simulator for simulated trading. Here is how you can use it to test stock and Forex trading strategies:
- Once you've installed the MTSE platform, you can start by pressing Ctrl+R or by clicking the button (as shown in the example below).
- Select your preferred template, based on the strategy you wish to test.
- Select the preferred time frame, and make sure that you have enough historical data loaded up. For a daily chart strategy, start with three years of data. For most intraday strategies, 6-12 months of data will be enough.
- Next, adjust your account balance to match what you will have in your live account.
- Once completed, click the Start button.
In this example, we will use the Master Candle template, and will simulate (approximately) six months of trading (note that this template is not one of the standard inclusions in MetaTrader Supreme Edition, so you will need to code the rules in MQL4 for this strategy, hire a programmer or obtain a template online).
To ensure the best speed and quality, apply these settings:
- Model: Open prices or Every tick
- Visual mode: Checked (to ensure visual backtesting data)
- Period: Select a period that matches your trading strategy
- Spread: Current
- You can speed up or slow down the visual backtesting process using the slider just after the visual mode option.
- If you use the Every Tick model to test your Forex strategy - bear in mind that it might take a really long time to finish backtesting.
- The Every Tick option should be the most accurate, but also the slowest one.
- Backtest and backtest again – until you discover profitable settings.
Once finished with the visual backtest, click the Results or Report tab and view the result. In the example below, we can see that the Master Candle strategy has produced approximately 6.72% ROI (Return On Investment) during the tested period.
After you finish with testing, you will be able to publish and print the result (see below).
Day Trading Simulator
The day trading simulator lets you place market and pending orders, set trailing stops, alter the stop loss and take profit on orders by clicking on the chart, save complex order definitions as templates, quickly close all open orders, and access many more features that are not available as standard in MetaTrader 4.
Once you select your historical data, the day trading simulator will go bar by bar through the markets and you can manually pause it to place a trade. It will then add up those trades in a Profit and Loss statement at the end of the time period, as described here.
Here's how you can do it:
- Open MetaTrader 4.
- Open the strategy tester by clicking on the icon or pressing Ctrl+R.
- Choose the expert advisor titled Admiral – Trading Simulator.ex4, then set your trading instrument and a time frame.
- If you do not know which testing model to use specifically, choose Open Prices only. Only use other settings if you have enough experience.
- Next, choose your preferred time window, making sure that enough historical data exists for this period.
- To make the simulation more authentic, adjust the initial account balance in the EA options to match your live account. You can do this by clicking Expert Properties within the simulator window, and then by clicking on the Testing tab.
To ensure maximum speed and quality of the day trading simulator, apply these settings:
- Model: Open prices
- Visual mode: Checked (to ensure visual backtesting data)
- Period: Select a period that matches your trading strategy
- Spread: Current
You can then apply different templates, add your indicators, trade normally, and see if your strategy worked or not. The major advantage of day trading simulators is the ability to backtest your strategy through different time periods. In the example below, you can see the example of backtesting using a custom template. The end result was EUR 1,748 in profit.
The day trading simulator will also allow you to thoroughly analyse your trading activity if you press the 'Analyse' button within the Mini Chart window.
MT Supreme Edition: Tools and Tips
The Smart Lines tool use line objects drawn on an MT4 chart as the stop-loss or take-profit for positions. They provide three main features:
- Trend-line stop-loss (or take-profit);
- Multiple partial stops at different prices (i.e. partial closes at different price levels);
- Time-based stops (e.g. close all positions at midnight).
When used with the day trading simulator, you can use the Smart Lines tool to make manual trades, which will then be tracked by the simulator.
In order to create a smart line, just do the following:
- Draw a horizontal line, a vertical line, or a trend-line on the chart;
- Hold down the Alt key while clicking on the line.
A window (such as the example below) will then pop up, allowing you to choose which action the line should take.
Tips to save time in your trading
Another helpful tool in MetaTrader Supreme Edition is the SpeedFactor parameter, which slows down the simulation. The larger the value, the slower the simulation. The main way of controlling the speed of the Simulator is to use the slider next to the Visual Mode box, which contains values between 1 to 32.
The effect of the slider depends on:
- How powerful your computer is;
- How many indicators you add to the simulator;
- How many ticks are in each simulated bar.
As a general rule:
- Value 32 on the slider will be extremely fast.
- Values 28 to 31 will be between 10 and 20 times faster than in real life (e.g., an M15 bar is simulated within 1 minute).
- Values 20 to 27 will be between 2 and 5 times faster than in real life.
- Values below 10 will be at approximate real-life speed (i.e. each M15 bar takes 15 minutes).
You can also experiment with the slider to find the best combination for your computer, and how quickly you want the simulation to run. Additionally, you can also control the speed of the simulation further using the EA's SpeedFactor property. You set this by clicking on the Expert properties button in the strategy tester, and then by altering the Value property on the Inputs tab.
When to Start Trading on a Live Account?
While Forex and stock trading simulators are excellent for practicing your trading, it is best to avoid performing too many demo operations in a trading simulator. Why? Simply because it is all too easy to use a demo account as a crutch, preventing you from gaining experience trading live markets with real money.
This is one of the reasons why many brokers' simulators have an expiry date - usually 30 days after opening a demo account.
The first step in transitioning to a live account after selecting your Forex simulator software is to set a goal - what do you want to achieve in your demo account before moving on to a live one?
Then, once you start trading in a live account, don't be afraid of failure. Traders often experience losses, especially towards the beginning of their trading careers. If you exercise risk management within your trading, you can manage the risks effectively, and may be able to avoid them altogether.
There are many cases of traders who failed at some point but ended up producing significant profits. For example, Jesse Livermore became famous making a fortune by shorting the stock market in 1929. However, he experienced both great success and humiliating failure during his ventures, filing for bankruptcy three times while also becoming a Wall Street legend by amassing a $100 million fortune through speculative trades.
Not every trader's story is as gripping as Livermore's. If you are afraid of failing, the good news is that you can gain experience and confidence by using risk-free Forex trading simulation software. Before trading forex professionally, it is critical to gain experience - preferably without losing money. You can accomplish this by learning about Forex trading and practicing what you've learned through demo trading, as discussed in this article.
When trading in a Forex simulator, it's especially important not to be afraid of failure. We've noticed that some traders open positions and then open another demo account to replenish their initial balance if they lose. However, this isn't how you'd behave with a live account, and shows that you're probably not prepared to face the inevitable losses that trading entails.
Operating with a free trading simulator should not influence your purchasing power. Instead, we still encourage you to operate as you would in the real market.
The next area to consider is creating a strategy. Many traders find it difficult to start trading on a real trading account because they find it difficult and risky to engage in trading without a trading strategy. Fortunately you can see our best strategies for getting started here.
Other links that may interest you:
- How to Trade Crypto CFDs: A Guide to Crypto CFDs
- The Best Forex Backtesting Software
- A Guide to Day Trading Strategies and Systems
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