Consider the following criteria when choosing your broker

Choosing a brokerCommissions – low commissions are important. However, like with all other things in life, paying the lowest price doesn’t get you the best product or service. The same is true with brokerage services. If you select your broker solely based on the lowest commissions available you will shoot yourself in the foot.

Good versus inferior order execution – some brokers, for example Interactive Brokers, provide clients with ½ second snapshot quotes. Other brokers provide real tick-per-tick quotes.

Providing ½ second snapshot quotes requires brokers to have less technological infrastructure. These brokers tend to have lower commissions, but you get what you pay for. Indeed, ½ second snapshot quotes show only roughly 25% of what happens in the market. This results in executing delays, unreliable technical analysis, unreliable charts and, most importantly, inferior order execution.

Order execution and quotes quality is crucial in futures trading. Loosing one single point unnecessarily on the a FTSE 100 future costs you £ 12,50. If you intend to trade more than 20 to 30 futures contracts per month you should seriously think about not using brokers with ½ second snapshot quotes. Look at it this way … no major institutional trader use this kind of technology.

Focus – select a broker whose core business is one single client category: YOU i.e. the active retail investor. The key word is active; not just retail investors. There are several big brokers who service retail clients. They are in no way comparable to those firms who only cater to active retail investors.

Two European brokers on the continent can be mentioned as examples, WH SelfInvest and Sino. WH SelfInvest is the bigger and is present in several European countries. This company solely focuses on active retail investors and has a legendary reputation for service. Sino is an extreme example of specialization in that the company serves only about 600 big retail clients (stock trading and futures) in Germany.

Also avoid brokers for which the retail business is small compared to their institutional business. At these companies the retail department will always be the stepchild as far as (human) resources and technology are concerned.

Legal base – for multiple reasons you should avoid brokers in the USA, Switzerland and places such as Cyprus or Belize. Obtaining a broker’s license in the European Union is much, much more difficult. The regulatory controls to which EU brokers are subjected are much more stringent. Your money is safer and your regulator’s ombudsman will defend your cause.

Technology – can be split into the trading interface you’re supplied with and “everything that’s behind the interface” i.e. the quotes and order execution systems. As far as trading platforms are concerned there are many and they’re very different. They range from free to very expensive. It is really a matter of finding one which you like. Don’t look at charting only.

If you want to be a futures trader also look at the order types and how you can easily change your live orders. Look at the possibilities in the domain of (semi)-automated order. Etc. You should definitely give this trading platform a look. As far as the execution part is concerned most active investors tend to go for brokers whose quotes and execution systems are based on either TT (Trading Technologies) or Patsystems. Execution is quick and the quotes are tick-per-tick quotes (see the topic of execution above).