This should have gone in the Newbie section but I saw a post in here about a broker so I thought I’ll contribute. My first ever started thread.
You don’t have to follow these steps but I did.
First off spreads are important but it is unlikely you will get a spread below 1.8 pips unless you are trading 50k upwards, some large institutions don’t even have spreads. As long as they don’t exceed 3 pips then it is okay.
Roll over fees. Now some brokers tell all kinds of stories. The only roll over fee you should care about is the swap rate which you can’t help. If your broker has Islamic accounts, those are swap free but good luck getting them, I tried they didn’t buy it 
on the flip side if you are buying the AUD/USD pair the swap is 60p on mini lot so that normally covers almost half your spread if you hold overnight. Some brokers charge extra, I’ll stay well clear of those.
Liquidity. This is major for me. Poor liquidity means more slippage but also execution rates can be affected as well because brokers can’t fill orders at times of extreme volume. Simply ask the broker who the liquidity providers are. The common players are Citi Bank, Barclay Capital, etc.
Broker/Dealers in my opinion a pure broker is better than one who deals and brokers who deal must always keep their funds seperate from client funds, most of the malpractices will come from these and they tend to be really well established names. Some Brokers have a tiny dealing desk and mostly don’t care about your activities.
Brokers who hold their own inventory. This is a problem, first off they provide their own liquidity which exposes them to risk, these can potential go bankrupt if they can’t monitor their own order flow. So I would ask if they do. These will hedge your positions and normally separate winners from losers and hedge against the losers meaning if Group A buy they will buy the equivalent of group A essentially increasing the downward pressure, if they have their own order book then we can see how the losers will wind up as heavy losers (Note this is rear) but the real risk is solvency in my opinion.
Brokers who don’t offer micro or mini lots and are pushing standard lots. This is bad for those new to FX. Standard lots are higher risk and mean most clients will over trade and loose their accounts. The ability to open smaller trades below 10,000 is important to good money management. These brokers will often limit your stops so you can’t pull them tighter than a certain point. Not good for risk/reward measures especially for scalpers.
Offshore brokers. These are a mixed bag. Most brokers go offshore for tax reasons but also these are often not regulated. I use an offshore broker but one that is registered in the UK, Australia and in several countries. This means that such a broker is unlikely to mess around. Always ensure your broker is registered with your local financial regulator. Most importantly they have their tier 1 account with a reputable bank.
Deposits and withdrawals. When you join a new broker ensure they have multiple withdrawal and deposit methods. Don’t jump at the prospect they accept Paypal. Most brokers can only pay you profits via the way you deposited for Money laundering reasons and fraud so before dumping in thousands deposit a small amount, trade and then request a withdrawal to test their reaction time. I once made a deposit to my broker via CHAPS into their tier 1 account which is in the UK, I have a UK bank account as a result it did not go via BACS instead hit their account within minutes, naturally they missed it as most people deposit via credit card, etc. They however found it once I contacted the account manager all within minutes. A worthwhile test in my opinion.
The rest are not so important…