canister filter should be fine, I was thinking of using one for mine just for mechanical filtration w chemipure inside to polish the water but decided against it bc of maintenance work. Like Critter Heaven said, u have to clean it often.
Or u can add a HOB sump like NY Steelo did w a nano tank, check out his very informative videos
https://www.youtube.com/watch?v=H5DJLfwF-PE
Here's one about DSB
https://www.youtube.com/watch?v=jon6SDZ3uNU
If u dont want the hassle of having to frequently clean the canister filter, I recommend using a DSB w Live Rock as natural filter in conjunction w ur skimmer. But w a 120g tank, a DSB w Live Rock is going to be expensive. Here's a DSB calc, u need min of 4" of sand for DSB
http://www.marinedepot.com/md_educationcenter_calculators_sand_bed_calculator.html And for Live Rock check out TBS who has amazing rocks direct from the Gulf so no need to cycle.
http://www.tampabaysaltwater.com/liverock/index.html
Using just 1-2 inches of "live" sand will not act as a natural filter. These "live" sands don't contain much beneficial bacteria. They come from a healthy Live rock that helps establish a DSB with beneficial bacteria. The organisms and bacteria that'll keep ur tank clean needs 4" min & sand grain size must be SUGARFINE w avg grain size of 0.125mm
http://www.ronshimek.com/deep_sand_beds.html
From my experience, canister filters were great but a hassle to maintain/clean having to disconnect/reconnect tubes, lug the heavy canister to sink to clean and then when reconnecting having to siphon the water. Just a mess compared to a sump.
Going the DSB w Live Rock route has high initial cost but long run once established u won't have to do as much water change and as much maintenance.