In this paper, a computer simulation technique for the forging process having a floating die is presented. The penalty rigid-plastic finite element method is employed together with an iteratively force-balancing method, in which the convergence is achieved when the floating die part is in force equilibrium within the user-specified tolerance. The force balance is controled by adjusting the velocity of the floating die in an automatic manner. An application example of a three-stage cold forging process is given.