There are so many online brokers now that picking one is like picking an insurance agent: there are a lot of things to think about, but sometimes it comes down to who you like.
The Commodity Futures Trading Commission (CFTC) and the National Futures Association keep an eye on all online brokers in the United States (NFA). Of course, other governments have their own agencies that keep things in order.
If you're thinking about working with a broker from another country, find out what their rules are and make sure they're on the up-and-up. There are people in the Forex market right now who are like the snake-oil salesmen who travelled the frontier a century ago, so "let the buyer beware."
In recent years, computer security has come a long way. Any reputable broker will offer the highest level of security, so that shouldn't be a factor.
Most Forex brokers offer both standard Forex accounts and mini Forex accounts. Some even offer "micro" accounts, which are one-tenth the size of a mini account, to help new traders get used to winning and losing real money without going broke while they're learning. So there aren't many options there either.
But watch out for hidden fees. The best brokers make money from trading spreads and a small overnight renewal fee for trades that go on past a certain time. Some others charge for everything they can, like the online live feed with up-to-the-second charts and price quotes, withdrawals and deposits, or a monthly maintenance fee.
Are their spreads as low as possible? In the U.S., the average tip is between three and five pips. Anything more than that is highway robbery. Are their spreads always the same, or do they change depending on the time of day or how much money you have in your account? Do your trades go through at the price you said they would, or is there some slippage?
In this game, knowing more gives you more power. So, do they train you or do you have to learn on your own? Does their free training only teach you how to use their software, or does it go into more detail about things like fundamental and technical analysis? Do they have a library of articles like this one that you can read online to learn how to trade?
Do they have tools that you can use to analyse the market? One of these could be a calendar with the dates when different countries release their economic data (unemployment percentages, interest rate hikes or drops, balance of trade data, etc.). Are their charting services up-to-the-second accurate, or is there a delay that could be disastrous for scalping? Can you easily look at points of support and resistance and figure out Fibonacci retracements?
The best online brokers have high-tech tools for trading. Among these are trailing stops, which follow a price as it goes up or down to help you keep your profits. You can also "hedge" by putting in two entry orders for the same currency pair, one "long" and one "short," so you can profit from the market moving in either direction. Many brokers will only let you make one trade per currency pair, and putting in a second trade will cancel the first one.
Lastly, this is a small thing, but how easy is it to put money into your account or take money out? Can you link your trading account to your bank or an online payment service like PayPal? Or do you have to wait for a check to come in the mail?
A good broker will be your partner for many years. If you make smart choices now, you won't regret them later.