A numerical method for simulating cryocooler below 10K, especially for VM cryocooler, is carried out based on the finite volume method. Compressibility, real gas effect, temperature dependence of properties and porous heat transfer are considered simultaneously in this model. The under-relaxation method is used to increase the stability of simulation. By comparison of the simulation results and experimental results, the simulated and tested no-load temperatures and cooling powers agree with each other very well. By using a computer program written, the lowest temperature, the pressure in three cavities, the real gas effect and the losses of cold displacer are comprehensively analyzed. Furthermore, the phase angle, the cold regenerator and the hot end temperature are optimized.