One question I hear (and see) a lot these days is: "Which is the best forex broker out there?". Unfortunately, there is no obvious answer. Of course, I have my own favourite broker right now, which I'm currently using, but a year ago, my answer was different as I was using a different trading technique. A lot of it depends on what you are looking for and what your priorities are. Some people only care about how low the spreads are; others want a reputable broker that's been around for a long time while others just want a broker that's located in the same geographical area as them. And some traders just want a broker that allows micro trading (trading 0.01 lot sizes), so that they can test out their strategies with real money without going broke!
The good news is that with the increased competition facing brokers, overall service quality has improved drastically. Brokers know that news travels fast, and that bad news travels even faster, so the entire forex trading industry is operating a whole lot smoother than it was 10 years ago.
The bad news is that there are still a few bad brokers out there which have questionable practices: stop-hunting (a strategy used by brokers where they attempt to force some traders out of their positions by driving the price of a currency pair - or any other asset - to a price level where many traders have chosen to set their stop-loss orders), shutting down accounts that are too profitable (believe it or not, it does happen), or poor customer service. Fortunately, these "bucketshops" usually don't last long (they're often referred to as bucketshops because the transaction goes "in the bucket"' and is never executed, as the broker plays the "bank" and is the counterparty to your trades).
Although it doesn't claim to be 100% complete, the forex broker comparison page makes it a whole lot easier to find the broker that's right for you. All of the brokers on there have been pre-screened to meet certain minimum standards and your money is considered to be safe with them. In addition, these are some of the industry's biggest and best known brokers, so you can consider using them with peace of mind.
Among the things you want to consider when choosing a broker are the following (and there are many other items which are not listed but which you will find on the 2 aforementioned broker comparison pages):
1) Is the broker regulated? Although some countries do not have regulatory licensing requirements, many do, and it's generally a bit safer to trade with them than with an unregulated broker. (However, there are still quality brokers out there that are unregulated!)
2) Does the broker have a dealing desk? If it does, then it means that the broker is a "market maker", then it means that every time you lose on a trade, the broker wins, therefore your best interests aren't necesssarily theirs, and vice versa! For more on this, read up on the types of forex brokers that operate. (Again, there are plenty of good brokers that have dealing desks, but it's nice to know all the facts before opening a trading account.)
3) Does the broker allow scalping? Some forex brokers do not allow scalping as it takes more resources on their end to manage numerous small transactions that only last a few minutes (or seconds!). Make sure that your style of trading is allowed by the brokers you are looking at.
4) Is the spread really that important? Some brokers offer super low spreads, but they lack other features and benefits, while some brokers have spreads that are considered average but they have all the bells and whistles that your trading style requires. If you are a scalper, then you should be seeking out those brokers who offer low spreads for the frequent trades you will be making, but if you are a swing trader that only places 2 or 3 trades per week, with the objective of making 100+ pips per trade, then the difference between a 2 pip spread and a 3 pip spread is not really all that important.
5) Does the broker provide managed accounts? Managed accounts are great for two reasons: when you're starting out, you may prefer to let others (with a proven track record) do the trading for you. These forex account managers, commonly referred to as signal providers, use different trading techniques, but they always have a track record which you can look over and a description of the type of strategy they are using. These signal providers get paid through the spread, so there are no added costs (and once you become an experienced and profitable trader, you can become a signal provider yourself, and get paid for providing these very same signals). Currently, one of the leading platforms for this great service is AvaTrade. Read more about them and open a demo account here on the AvaFX website. Take a look at all of the signal providers they have and see if there's one you would like to try out (it's free to try, there's nothing to buy!)
Here's an example of one of the strategies you can use ("Legacy"):