Criteria considered in the choice of the broker
- Low spread and commission, typically less than 1pip for EUR/USD
- No dealing desk involved in quoting & controlling market prices (no market making) but rather a STP (Straight Through Process) or ECN (Electronic Communication Network) type broker. all orders are passed through to Liquidity Providers (other brokers and banks), where they are executed at the bid/ask rate given by those Liquidity Providers. Whether it be the contracted liquidity providers of the STP, or the anonymous liquidity providers that make up the ECN, both have variable spreads that are low and competitive, and both have fractional 5-digit pricing.
- Regulated in a safe jurisdiction: USA, UK, Switzerland or Australia
- Quality of price feed
- Customer reviews from major websites such as forexpeacearmy.com
- Responsiveness of client service
- True Swap Rates
- No re-quotes or very few
- No slippage when closing trades.
- Low spread spikes during news events
Another aspect to take into consideration is the distance between the ISP server and the broker server. The longer the distance the greater the latency in execution of orders. Therefore a VPS (Virtual Private Server) close to the broker server will have the benefit of reducing latency but also the guarantee of reliable internet connection.