DCB is shorthand for direct cost-benefit analysis, and it is not a broker, a platform, or a regulated product. It is a worksheet. You list what a trade costs, subtract those costs from what the trade earned, and look at what survives. The reason this deserves more than a shrug is that in the European Union the same arithmetic is a legal obligation, and your broker has already done part of it for you.
What the three letters actually stand for
Direct costs are the ones attached to a specific trade: the bid-ask spread, the per-lot commission an ECN or STP venue charges, and the swap or rollover applied to a position held past the daily roll. Indirect costs sit behind the trade rather than inside it, and include platform fees, a virtual private server, and paid data feeds. Net benefit is gross profit minus both. Break-even rate is the gross return you need before anything is actually yours.
A strategy that wins 6 trades out of 10 can still lose money.
That is the whole point of the exercise, and it is also where most informal versions of it fail. Traders who estimate costs from memory tend to use advertised spreads rather than realised ones, forget the swap on positions held for weeks, and treat slippage as an unlucky exception instead of a recurring line item. Each of those mistakes flatters the strategy in the same direction, which is why a system can look profitable on a spreadsheet and drain an account in practice.
The cost table the law already requires
The Markets in Financial Instruments Directive, known as MiFID II, has applied since 3 January 2018. Article 24(4) of the directive and Article 50(2) of the Delegated Regulation (EU) 2017/565 require a firm to aggregate all costs and charges connected to both the service and the instrument, to itemise third-party payments separately, and to express the total both as a cash amount and as a percentage. The disclosure must reach you in good time before the service, and it must include an illustration of how those costs affect your return. A separate annual statement reports what you actually paid.
The European Securities and Markets Authority published a worked example of the required format. Investment services appear as 1,500 euros, or 1.5%. Third-party payments received by the firm appear separately as 500 euros, or 0.5%. The financial instruments add another 1,500 euros, or 1.5%. The total is 3,500 euros, equal to 3.5%. In the United Kingdom, the same ground is covered by chapter 6 of the Financial Conduct Authority's Conduct of Business Sourcebook.
| Cost line | Cost category | Who discloses it |
|---|---|---|
| Bid-ask spread | Transaction cost | Your broker, ex-ante and annually |
| Per-lot commission | Transaction cost | Your broker, ex-ante and annually |
| Swap or rollover | Ongoing charge | Your broker, in the annual statement |
| Platform or data fee | Ancillary service charge | Your broker, if you pay it to them |
| Slippage | Outside the table entirely | Nobody. You measure it yourself |
Why the FCA went looking, and what it found
A disclosure rule is only as good as its enforcement, and the record here is mixed. The Financial Conduct Authority reviewed the costs and charges disclosures of 50 authorised MiFID investment firms. It found that firms understood their obligations, interpreted them inconsistently, and were noticeably better at disclosing the cost of their own services than at disclosing third-party costs. It also found evidence that firms were not sharing cost data with each other, which is what the aggregated figure depends on. None of that makes the disclosure useless. It does mean the percentage on page four of a key information document deserves a second look rather than blind trust.
Building the same table yourself
Take one month of your own trading, not a hypothetical. Pull the entry and exit price on every closed position, because the gap between them is your realised spread rather than your broker's advertised one. Add commission per lot. Add the swap accrued on each night a position stayed open. Compare the fill you got against the price at the moment your order left your machine, and record the difference as slippage, signed. Add fixed monthly costs, such as a virtual private server or a paid data subscription, divided across the number of trades you actually placed. Divide the total by the number of trades and you have a per-trade cost figure that is specific to your account.
Compare trades that closed in profit.
If the average winner clears the per-trade cost by a wide margin, the strategy has room to survive a bad month. If it clears by a fraction of a pip, the edge is a rounding error and a single week of elevated spreads during a central bank decision will erase it. This is a diagnostic, not a forecast. It tells you what your costs were, not what your returns will be.
How leverage quietly enters the cost column
Leverage does not appear in the DCB worksheet as a line item, which is why traders underestimate it. It enters through the swap and through position size. A retail client in the European Union is capped at 30 to 1 on major currency pairs under the product intervention rules that national regulators made permanent, with 20 to 1 on major indices and 2 to 1 on crypto assets. Hold a position for three weeks at that leverage and the financing line can exceed the spread you were so careful about. Two traders can run the identical entry and exit and get different results purely because one sized twice as large and held three times as long.
Checking a broker's numbers against its own
Three documents let you audit a firm without asking it anything. The ex-ante cost disclosure shows what it expects to charge. The annual ex-post statement shows what it took. Your own account history shows what you actually paid, and it is the one set of numbers the firm cannot editorialise. Where the three disagree, ask which methodology produced each figure. If a firm cannot explain how its percentage was calculated, that is information about the firm.
Regulators and registers to check: the FCA register for a UK entity, the national competent authority register for an EU entity, and the ESMA questions and answers on investor protection for the cost aggregation rules themselves. Any claim about a specific broker's costs should be checked against the firm's own published disclosure, not against a comparison table on an affiliate site.
General information only, not investment advice. Regulatory requirements and broker fees change, so confirm current obligations and charges with the relevant authority or provider.