The good news is, it really doesn't make THAT much difference!
A Good Forex Trader will make money at ANY BROKER!
The key to profitably trading foreign currencies is small losses / BIG WINS and every broker will let you do that.
That being said, finding the broker with the smallest spreads in the currencies you plan to trade can make a difference but is not the ONLY thing you should look for, thus my comment above.
One thing that is important in keeping losses small is a tight stop loss and the SPREAD of the broker can make a difference in your trading results.
There are two different types of Forex Brokers. One has fixed or changing spreads and the other has tighter spreads but charges a commission. It's CRITICAL you compare the TOTAL COSTS between these brokers. If the spread is 1 pip less but they charge 1 pip commission or the equivalent of 1 pip then the costs are the same.
For example, say you're trading the EUR/USD. With most fixed or variable brokers the spread is usually 2-4 pips. This means you are paying $2 to $4 per mini lot ($10k of currency) or $20 to $40 for a full lot ($100k of currency). This can obviously add up so spread is very important as its a COST OF DOING BUSINESS that you incur on each and every trade! It reduces the size of your profitable trades and adds to the losses you suffer when wrong.
So while spread is important it's not everything. You have to feel comfortable with that brokers trading platform and for this you have to know what style of trading you'll do. Some traders scale into and/or out of trades which is harder to do with a Meta Trader account since it lets you add a new position and you have to exit each trade separately! For this reason traders who scale in/out of trades generally like FXCM's regular trading platform because it allows you to do this.
Also what EXTRA's such as market research, additional Forex Trading Software, etc do they provide. We are a Forex Software Developer with tools that when learned give traders an incredible edge. We sell our software for $2,000, lease it for $150 per month or give it away free if you trade with FXDD, FXCM or FX Solutions and we are your referring broker. Our software requires eSignal data which our broker partners pay for. This costs $100/mo and is no charge to our users!
Whether you trade with us or another firm KEEP THESE KINDS OF THINGS IN MIND when choosing a Forex Broker. Sure you may pay 1 pip less at some brokers but if you are LEFT ON YOUR OWN with archaic tools and no help in finding the best currencies to trade and no alerts on exactly when to buy and sell you will be at a severe disadvantage compared to our traders who are fully armed with the best Forex tools available to retail traders.
So to Summarize:
1) Demo trade with each platform to find the one you are most comfortable with. Make mistakes on DEMO so you don't lose money unnecessary before trading with YOUR real money.
2) Spread is important and it varies between currencies. Determine the ones you will trade most frequently and find a broker with the tightest stops where you ALSO like their trading platform.
3) Extras - With our Forex Broker partners FXDD, FXCM and FX Solutions you get our $2,000 software FREE and also eSignal data FREE which saves you this $100/mo cost!
4) Training - Most Forex Brokers provide no training whatsoever. It's a churn and burn business for MOST BROKERS. By signing up with one of our brokers through us, it doesn't cost you a penny, your spread is the same as if you went directly to them but you get our software and data free and you also get one free week of Forex training where we teach you how to use our tools which find strongest and weakest currencies and we teach you over a dozen profitable trading methods. We go over 50 to 150 trades during that week so you will have a clear idea of how you are going to trade. This is invaluable!
