There are two most common ways of choosing a Forex broker:

1) Simplified or lazy way which is to read broker reviews, and based on stars and feedback make a choice.

There will be no guarantee, however, that a 5 star rated broker will be the best choice for your trading needs, or that the reviews you’ve read were actually genuine (unfortunately, that’s the reality of online reviews submission).

Choosing a broker: Step 1 Know what You want from trading

Start by creating your very own List of broker features needed.

Choosing your first (or next) Forex broker can be much easier when you sit down and make a Wish list of services and features desired for trading.

Questions to add to your List:

- what currency pairs are you going to trade?

- what spreads would suit you (fixed, variable, how many pips)?

- do you accept paying a commission for trading Forex?

- what would be your minimum investment (account size)?

- what leverage do you need?

- what tools, indicators do you need for trading?

- do you need a specific trading platform (like MT4)?

- do you want to scalp?

- do you want to hedge?

- do you need a trailing stop?

- do you need one-click-trading execution feature?

- do you wish to have mobile phone trading feature and/or trading alerts?

- do you care whether it is going to be a ECN/ STP or a Dealing Desk broker?

- do you care about reputation of a Forex broker? (You must actually care, for the safety of your investment).

- which way (wire transfer, Paypal, credit card etc.) can you transfer and receive funds? There could be restrictions depending on the country you live in.

- how much would it cost you in fees to pay for funding, transferring, withdrawing your money?

Sort those questions by the level of importance to You, add your own and begin the Search.

Choosing a broker: Step 2 Do the search for matching brokers

Scan the network, use search engines and visit every broker website. That’s what traders did in the past!

Choosing a broker: Step 3 Pay a visit to broker’s website

After narrowing down your choice to few Forex brokers, it is time to make a further research by visiting brokers’ websites and reading about their Forex trading rules and policies, understanding the terms and conditions; getting a feel of the transparency of the business they do: availability of addresses and phones, customer support services, presence of the information of regulatory institutions they are supervised by.

If a broker doesn’t have any physical address listed on the website on the Contact page (or anywhere else, where it’ll be visible to visitors) it should sound an alarm in your head. Phones, chats, skypes, emails — all that doesn’t count if there is no address!

Secondly, the overall appearance of the website can tell about its owners. It doesn’t have to be all modern and interactive, written on Flash etc, but it should have a professional look and all pages and links must be functional.

Something like Coming soon on an empty page is not acceptable! To a new visitor, it always looks like this is a temporary message, but from our experience we already know — it is going to be Coming soon for months and years(!). A Forex broker who has opened a business and is accepting money from clients cannot allow a website to function partially!

Next important factor: your best choice would always be to open an account with a Regulated broker a broker which is registered with appropriate authorities and remains under their supervision and regulation.

- United States: NFA, CFTC

- Canada: BCSC, CIPF, OSC

- United Kingdom: FSA UK

- Switzerland: SFDF, ARIF, FINMA

(Since 2009 all Swiss Forex brokers require to have a banking license)