General criteria to choose a Forex Broker

Is the Broker regulated?

Different countries apply different regulation rules, but it is always important that the broker is regulated. It is also important to know if the Broker is regulated in and on-shore or off-shore country, as, the latter are more flexible when it comes to requirements for registration.

Here are some countries with regulatory agencies:

• USA (CFTC, NFA)
• UK (FSA)
• Australia (AFSL)
• Switzerland

Market Maker (MM) versus Electronic Currency Network (ECN)

There are 2 types of brokers: the ones who create market prices (MM) and the ones that provide the best bid and offer price from their own liquidity providers (ECN).
Usually ECN show the volume avilable for each bid and offer but MM don't.
Usually ECN offer tighter spreads than MM but include a commission
ECN often have limitation on the account size that doesn't allow small traders to use them

Leverage

Often Traders are interested in very high leverage and see la leverage of 400:1 a big advantage. But such leverages include very high risks (I think too much) and probably a Trader should never use it. Then if you trade with a reasonnable leverage (for instance under 10), it doesn't matter very much if the maximum leverage is 50 or 400.

Costs of Trading

Costs include the spread (the difference between the bid and ask prices), overnight interest and any other commission fees. All these paraleters need to be taken into account not only the spread. Usually the overnights interest are pretty much the same for all brokers and it doen't affect you if you are only daytrading.
Two other factors affect the costs:

• re-quote: offer of a new quote in general worst than the one originally offered
• slippage: stops not executed at the expected price in fast moving markets. The stops are executed with delay that generates additional losses

Quality of the platform

Two aspects are of main importance: the reliability and the user friendlyness. You can get a taste of it using the demo versions of the different Brokers. Even if the demo version are not exactly the same that the production ones it will give you a taste of the interface and speed and reliability of the platform. Of course it will not replace the real experience.

Customer Support

Here again it's difficult to say before you have join the Broker but you can check it also during the Trial period that you should first use before joining the Broker.