Looking for the best Forex broker? Not all Forex brokers are alike. Depending on your trading plan (you do trade with a plan, right?), one broker may be better suited to handle your trades than another broker.

For example, if your trading plan is comprised of the carry trade strategy, then a broker that offers attractive rollover rates would be best for your trading system. If you scalp or use automated trading software that scalps, then your strategy would work best with a broker that offers very tight spreads.

There are other important considerations when choosing a broker, which I cover in the following sections:

Type of Broker

In today's Forex market, there are several types of broker from which to choose. These include Dealing Desk, Non-Dealing Desk, Electronic Communication Network (ECN), and Straight Through Processing (STP) brokers.

A particular type of broker may be more suitable for a specific trading strategy than others. For example, if your trading strategy involves scalping, then an STP broker with its tight spreads would likely be best for you.

Financial Strength

Make sure your forex broker has the financial strength to meet its obligations. Unlike U.S. banks, the funds you deposit with a forex broker are not insured. That puts them at risk.

Although it’s no guarantee to safety, having your funds with a financially-strong Forex broker can provide you some peace of mind.

Regulation

Forex brokers who submit to regulation by the major regulating bodies in their respective regions, they can provide a higher degree of comfort and security for their clients.

In the U.S., Forex brokers can become members of the Commodity Futures Trading Commission, or CFTC. They can also join the National Futures Association, or NFA.

If a U.S.-based Forex broker is registered with these organizations, you can check with them to see if the broker had any problems with membership. Uncovering such issues may affect your decision to do business with them.

Conclusion

Although finding a financially-strong Forex broker who is a member of a regulatory organization is no guarantee to your fund’s safety, it is a step in the right direction when it comes to minimizing risk.

And considering the high risks already associated with Forex trading, every step towards safety counts!