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).

2) Professional way — which is to do your own research while making reading reviews a part of that research.
We're going to describe the steps of making a professional choice:

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! Today, you can or try our Advanced Forex broker Search tool >>>

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
- Switzerland: SFDF, ARIF, GSCGI.
  (Since 2009 all Swiss Forex brokers require to have a banking license)
- Sweden: FI
- Denmark: Danish FSA
- Spain: CNMV
- Japan: FFAJ
- Hong Kong: SFC
- Australia: ASIC, AFSL
- Dubai: DMCC, DGCX, DFSA, ESCA
This is not a complete list, for other countries there will be other regulatory bodies to supervise Foreign exchange businesses.

Choosing a broker: Step 4 — Read reviews about selected brokers

We have our own section of Forex brokers reviews, but we encourage you to search for additional reviews online in order to make a decision: type in your Search browser: "[Broker name] reviews" and follow the links to read more reviews.

As much as reading reviews about Forex brokers can be helpful, it also can be confusing and overwhelming. Often times we hear from traders that after reading reviews they've seem to have hit the wall and no longer sure what broker to choose, because there is so much bad and good mixed up in reviews about every single broker, it is almost impossible to filter out the truth and make a choice. What to do?

We suggest sticking to the simple rules:

a) if a broker has been in the industry for more than a decade - it tells you that the company knows a lot about doing Forex business and caring about clients, otherwise it won't be here today.

b) if a broker is regulated by a major regulatory body in its country - it tells you that a broker is serious about its business and making necessary efforts to align with rules and requirements imposed by the supervising bodies.

c) if a broker offers more that one trading product, e.g. besides Forex also has Futures, Stocks, Options, Commodities, CFDs etc - it tells you that a broker runs a larger business, carries more responsibilities and has more clients trading with them.

Filtering good and bad reviews

Be selective about reviews you read, always analyze who was the person who wrote a review: was it a professional trader, or a novice.
By the actual message of the review it is often possible to see not only the level of education a trader has, but also how well he knows the subject he writes about. This way you'll filter lots of bad reviews where newbies accuse brokers in troubles they fall in because of own incompetency.

Apply a filter to 5 star reviews as well. It is not rare to see reviews submitted by brokers themselves in order to boost own ranking.
These reviews have a special "flavor" too and despite many efforts to hide the real face of the reviewer, it is not difficult to spot a promotional message hidden behind the review, other times it is 100% clear it was a promotion. Your job is always to have a cool head and judge everything objectively.

Choosing a broker: Step 5 — Final tips for the right attitude

Finally, your approach to choosing a Forex brokers should be somewhere similar to the process of choosing the right bank to trust your money to: reputation, transparency, convenience of carrying operations with money, good customer support.

Client Agreement? What's this?
As practice shows, many Forex brokers may (forget?) to update their websites according to newly changed trading conditions, e.g. show 1 pip spread while in reality it is already 2 pips, allow scalping, while in reality - don't. If you don't read Client Agreement, but instead simply put a check box "I agree" in front of Terms and Conditions while applying for an account, you're doing yourself no favor.

Let your choice of a good Forex broker be easy and rewarding!

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Watch video from Rob Booker: What to look for when choosing a Forex broker?