If you want to succeed in Forex Market you must choose a good broker. It is crucial part of this business, because you need the right tools to get the job done.
First of all, your broker should be reliable. It should be in business for more than 5 years. It should be regulated by dedicated regulatory agencies(NFA in United States, FSAuthority in United Kingdom). This does not guarantee 100 percent that your broker will not run with your money, but it at least gives some security over your funds.
The spreads should be as low as possible. Usually the ECN brokers have the lowest spreads, but you have to pay commission for every trade. This part is always overlooked by a newbie traders(and for experienced also). Low spreads are crucial part of the trading. For example, if you make 100 trades and the spread is 2 pips, you are paying your broker 200 pips value of money(lucky broker!). Look for non-fixed spreads as this shows that broker is serious about his business.
Broker should have a reliable trading platform. It should be working properly on major news releases(such as NFP). Also orders that are already placed on the server end should be executed very precisely. Often, when you try to execute the orders in real time, you get the slippage. But when the orders are already set on the server, they should not get slippage.
Of course, broker needs to have a very good customer support. All major brokers are investing in this service. Usually they have 24/7 chat where you can ask any questions you want. Be aware by giving them your phone number as they are very quick at calling and trying to convince you to send them money(if you have not done that already).
Also be aware of the brokers that are offering very high leverage(more than 1:100) and allow to open mini-accounts with lower than $1000. It’s 99.99% possibility that you will lose all money in that account, because 1 pip is worth $1, so if you lose 100 pips(which is very easy to do) you will lose 10% of your account. Broker knows that and that is why he tries to convince you to send him money. You need at least $5000 to trade mini account.
Broker should offer some free services to their customers, such as streaming news, charting software and etc.
Useful resources:
Electronic Communication Network
Leverage
NFP
Slippage
It is also important to contact broker before you open an account and deposit some money. Send them an email, ask something you would like to know. You will learn lot about them from their response. Also, always trade at least a month on demo with an broker before you decide to invest real money.
I think customer support is the key for choosing the right forex broker. When setting up an account, the best things to find out are the times for support and whether or not they have live chat functionality.