1. Must be regulated by a regulatory authority.
2. Must have a (relatively) clean regulatory record.
3. Must have they been in business for several years.
4. Must have a segregated bank account for holding retail client funds.
5. Must be a member of a compensation fund, which compensates losses (up to a certain amount) in case of insolvency.
6. Must have a negative balance protection policy.
7. Must fulfil capitalization requirements set by the government.
8. Must be a publically traded company.
9. Must have a solid security check in case of withdrawal of capital by customers.
1. Must provide an account in the base currency of your choosing.
2. Must be a Non Dealing Desk (NDD) broker.
3. Which currency pairs do they offer?
4. What other instruments do they offer for trading (metals, oil , gold , indices, etc)?
5. Do they allow hedging?
6. Do they allow scalping?
7. Do they offer a mini or micro account?
8. Must offer a free demo account to get familiar with their execution environment.
9. Do they have price alerts (by email, SMS or push notification)?
10. What leverage do they provide?
10a. Can I select the leverage I want per trade?
10b. Or is the leverage automatically set based on equity?
QUALITY OF SERVICE
1. Speed and ease of deposit and withdrawal of capital.
1a. Do any broker fees apply?
2. Speed and ease to open a live account.
3. What is the policy and track record on fills?
4. Does the broker offer guaranteed stops?
4a. Do they guarantee an absolute limit on the potential loss (read: the full risk of slippage is for the broker)?
4b. Is there an extra cost involved (like an additional spread)?
4c. What conditions hold for these guaranteed stops (can I change them or delete them for open trades)?
COSTS OF SERVICE
1. Are the service costs competitive?
1a. Fixed or variable spreads?
1b. How much do spreads widen during news events?
2. What is the roll over during the week and during the weekend?
2a. Are these rates applied to the account weekly or daily?
3. Are there inactivity fees?
4. Do they offer interest on the entire account?
To be continued in "Selecting the Right Broker for You Pt. II". See the link under Related Ideas.