The following links might also be useful to you to gather some background information on U.S. registered brokers.

• Selected Financial Data for FCMs

• NFA Background Affiliation Status

1. Word of Mouth

• What do other traders say about the broker?

• What is their customer service/ dealing desk like?

2. Safety of Funds

• Is the broker regulated?

• Are client funds insured?

• Is your risk limited to deposited funds?

3. Execution

Some brokers will show live prices on their trading platform, but will they honor them when it comes to pushing the Buy or Sell button?

The best way to find out is to open a demo account and give them a test drive. This will also give you the opportunity to see what the speed of execution is like - when you want to buy, you want to buy now, not sit around waiting for ten minutes whilst your order is confirmed!

• How fast is the broker's order execution?

• Are orders executed automatically?

• How much can you trade before having to request a quote?

• Are customers orders offset, or do they trade against you?

4. Spread

Because currencies, unlike futures and stocks, are not traded through a central exchange, the spread can be different depending on the broker you use, so it's well worth checking a few out before you open an account.

Most forex brokers publish live or delayed prices on their websites so you can compare spreads, but check if the spread is fixed or variable. A fixed spread means exactly that - it will always be the same no matter what time of day or night it is. Some brokers use a variable spread, which might appear to be nice and small when the market is quiet, but when things get busy they can widen the spread, which means the market must move more in your favor before you start to make a profit.

Fixed spreads are generally slightly wider than the variable spreads are when at their narrowest, but over the long term fixed can be safer.

• How tight is the spread?

• Is it fixed or variable?

• Is it larger for mini accounts?

5. Slippage

• What is the broker's policy on slippage?

• What sort of slippage can you expect in normal and fast moving market conditions?

6. Margin/ Leverage

• What is the margin requirement?

• Is it calculated on the notional value of a transaction, or a fixed dollar amount per lot?

• Does it change for different currency pairs/days of the week?

• Is it the same for standard and mini accounts?

7. Commissions

• Does the broker charge commissions?

8. Rollover Policy

• What is the broker's policy on crediting/debiting interest to your account?

9. Trading Platform

Good trading software will show live prices that you can actually trade at, not just indicative quotes. It will offer Limit and Stop orders, and ideally will let you attach these to your entry order.

One-Cancels-Other orders are another useful feature - they mean you can set up your trade and then leave the software to get on with it. And the most important feature of all - can you actually understand the platform? Having all the bells and whistles is of no use if you can't use them, so again, get a demo account and give it a go.

• How reliable is it during volatile periods and news announcements?

• How many currency pairs can you trade?

• Do they offer automated trading?

• What other special features does it have? e.g. Trading from the chart, complex orders, trailing stops, etc

10. Account Size

• Can you trade mini accounts?

• Can you adjust the standard lot size traded?

• What is the minimum account opening balance?

11. Support

Forex is a 24 hour market, so your broker should offer 24 hour support. You might not be trading at 3am, but that could be what time it is in your brokers head office on the other side of the planet, so make sure there will be somebody there to pick up the phone if things go wrong. You should also check if you can close positions over the phone - essential in case your PC or internet connection crash at a critical moment.

12. Backing

Finally, before opening an account do a little homework and find out about the company. Forex brokers are regulated, but that doesn't mean they all have equal backing.

If the market collapses, you want to know that they've got the reserves to cope with it and will still be around when you decide to withdraw your cash. If a broker is elusive when it comes to questions about their parentage and financial backing, then steer clear.

Conclusion
Choosing a forex broker isn't difficult, but don't rush the decision. Check out a few, and always get a demo account first to make sure you're happy with the way everything works before sending off your opening balance.