Licensed and Regulated
If the company does not belong to a recognized authority, do not trade with them. Unlike some equity brokers, Forex brokers are usually tied to large banks or lending institutions because of the large amounts of capital required (liquidity they need to provide). In addition USA brokers should be registered with the Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTCT) National Futures Association (NFA) there are many other regulatory or licensed providers in various countries.
It should be noted that just because your Broker is licensed and regulated there are no 100% guarantees, However, it takes a lot of time effort and money to become regulated and companies are scrutinized, particularly if a client raises an issue.
Try to find out how big the company is, how long it has been operating, who is the money behind the business and liquidity providers. You will have to research this yourself, some people wish to remain anonymous within the industry, however, the company should be registered legally and disclosure should be provided.
If you are not requested to produce, official documentation on the opening of a “funded account” be suspicious.
POI, proof of Identity = passport or driving licence
POR, proof of Residence = utility bill (within 3 months)
A minimum of 1 phone call from the company to verify your phone number.
The chances are, the company is not operating legally. Avoid companies like this because you can possibly kiss your hard earned cash good buy at any time.
Corporate accounts will be required to provide far more documentation than is required from an individual trader.
Multiple base currencies
To avoid losing money on the exchange rates from your local native currency into USD and then from USD back into your currency on withdrawal, make sure you can trade in your local currency. At minimum, a good MM/Broker should offer EUR, USD, CHF etc. as BASE trading currencies. If they don’t, be sure to check the “exchange rate” on transfer of your hard earned money.
Multiple ways of depositing your funds will save time and inconvenience. Payments not limited to credit card, Master Card, visa, wire (bank transfer), online payments such as Netella, Web Money, Pay Pal, Money Bookers, are to name just a few.
For larger transfers Brokers will usually insist on wire transfer.
Withdrawal Fees & Execution time
What is the point of investing successfully if you can’t withdraw your funds in a reasonable amount of time? Make sure you are not charged for withdrawing YOUR money. (banks will always take transfer fees, but the market maker or broker should not). Also be aware that you will generally receive your funds back the same way that you initially deposited.
Does the company help you, are your questions answered, is assistance there 24/5 if required.
Many companies will promise the earth to get you to deposit, all this and more, see if they deliver what they promise.
What “benefits” do you have trading with them over a competitor?
Fixed or variable spreads work best for you?
What is the Maximum or Minimum you can invest on an investment?
There are many brokers out there, do your homework and you should not be disappointed.
Use websites like Forex Financial Markets to help you make the right choice.