Economics: The FOREX Challenge

The FOREX Trading Simulator is an interactive, browser-based market simulation designed to replicate the dynamics of real-world foreign exchange trading in an accessible and classroom-friendly format. It places users in the role of a currency trader, starting with a fixed cash balance and navigating live-updating exchange rates across major currency pairs such as EUR/USD, GBP/USD, USD/JPY and AUD/USD. Prices evolve continuously in response to volatility, correlations between currencies, scheduled macroeconomic announcements, and unexpected global shocks, allowing learners to experience how exchange rates are shaped by economic data, central bank decisions, speculation, and geopolitical events in real time. 

The simulator plays out over a fixed trading horizon, with each in-game day bringing new information to interpret and act upon. Students can choose when to buy or sell currencies, decide how much to trade, and manage an evolving portfolio that records average purchase prices, unrealised gains or losses, and realised profits once positions are closed. A live news feed delivers market commentary, data releases, and surprise events, encouraging players to link information to price movements rather than trade randomly. Transaction costs are built into every trade, reinforcing the idea that real markets involve frictions and that frequent or poorly timed trading carries a cost. At the end of the simulation, players receive a detailed performance summary including profit or loss, return on investment, win rate, and an overall performance grade, encouraging reflection on strategy rather than short-term outcomes.

Pedagogically, the simulator is designed to support the teaching of exchange rates, financial markets, and macroeconomic transmission mechanisms. It helps students understand concepts such as appreciation and depreciation, the impact of interest rate decisions, inflation data and employment reports, the role of speculation and expectations, and the way currencies move together or in opposition due to global capital flows. By visualising profit and loss in real time, it also reinforces numeracy skills, percentage change calculations, opportunity cost, and risk management, making abstract theory tangible. The inclusion of correlated currency movements allows learners to see why diversification matters and why shocks in one region can spill over into others.

For teachers, the simulator functions as a flexible teaching tool that can be used for whole-class demonstrations, structured lessons, or independent and group activities. It can be deployed as a starter to introduce exchange rate theory, as a core activity during a unit on international economics or financial markets, or as a revision exercise that consolidates multiple topics in a synoptic way. Teachers can pause the simulation to discuss unfolding events, ask students to justify trading decisions, or compare alternative strategies across the class. The fixed time horizon and automatic end-of-game summary also make it suitable for assessment for learning, reflection tasks, and exam-style evaluation questions.

For students, the simulator provides a low-risk environment to experiment, make mistakes, and learn through consequence rather than memorisation. It encourages active engagement, strategic thinking, and evidence-based decision-making, as success depends on interpreting information rather than guessing market direction. By combining gameplay with rigorous economic logic, the FOREX Trading Simulator bridges the gap between theory and practice, helping learners develop a deeper, more intuitive understanding of how currency markets operate and why they matter in the wider economy.