The trading spread is the difference between the ‘bid’ and ‘ask’ prices (buying or selling prices), of a trading instrument. Since forex profits and losses are measured in terms of pips, lower spreads translate into lower trading costs and more profits. For example, the cost of entering a 100,000 unit trade, with a spread of 1 pip, is $10. In contrast, a 100,000 unit trade, entered when the spread is 3 pips, would cost $30. Some brokers may vary their spreads on holidays and during news releases, depending on market liquidity. Shop around for the best trading spread, as they can vary greatly between brokers.
Broker Registration and Regulation
Ensure that the broker, you are considering, is registered with a regulating authority such as: The National Futures Association (NFA), The Commodity Futures Trading Commission (CFTC), or The Financial Service Authority (FSA). These regulating agencies see to it that its members abide by the rules that safeguard the market's integrity and protect investor interests.
Charting Package and Features
Does the broker offer a charting package that has the features and technical indicators you will need to execute your trading strategy? If the features you want are not provided by the broker, you may have to pay for an add-on charting package. Choose a broker that has the full package with what you want, so you will not have to spend extra.
There is no right or wrong answer for this one. Generally speaking, trading with high leveraging is risky, but this is entirely the call of the trader. If your trading strategy calls for a 100:1 leverage, then you should ensure that any prospective Forex broker offers that leverage. If you don’t want to be tempted to use high leveraging, then you might want to go with a broker who has a maximum leverage of say, 20:1.