The D-Score is the score which Darwinex uses to grade all DARWINs based on a combination of the 12 scores which reflect our investable attributes.
What is the D-Score?
All DARWINs are graded by our investable attributes with a scores which goes from 1 to 10. These scores make a general score called a D-Score.
The D-Score is calculated thanks to an algorithm which takes into account the combination of 12 scores which show our investable attributes. Its values fluctuates between 0 and 100, the higher the score the better the D-Score.
The investable attributes must respect five basic principles.
They must be able to compare all types of strategies, independently of their risk, trading style (scalping, swing, intraday, etc.)
The 12 investable attributes are completely decorrelated from one another, if one score goes up, it does not mean another score will go up or down.
A higher score must always indicate a higher quality in the attribute in question.
One investable attribute by itself cannot determine the overall quality of a strategy.
The quality of a strategy depends on the combination of the 12 investable attributes established by our algorithms.
What is the aim of the D-Score?
All DARWINs, as well as their underlying strategies at Darwinex, are graded with a D-Score, which can be found in the page header as shown in the images below.
Our aim with the investable attribute is to measure the quality of a DARWIN with the least number of parameters possible.
The ultimate aim of the attribute scores, and the D-Score, is to offer an indication of likely future return.
After having done thousands of backtests and simulations, as well as live tests, we can certify that the better the D-Score, the more future return can be expected.
The most relevant information that the investors can use to make their trading decisions are the 12 investable attribute scores and the D-Score.
The D-Score is the quickest way to compare the DARWINs' quality.
Although we consider the investable attributes and the D-Score to be the most important metrics to take into account when taking investment decisions in DARWINs, Darwinex also offers a collection of complementary statistics which can be founds under the tabs ''Return/Risk'', ''Assets and Timeframes'', ''Divergence'', ''Correlation'', and 'Underlying Strategy.''
As we have seen, the D-Score is a calculation of the scores of the 12 Investable Attributes with Darwinex grades DARWINs/trading accounts. One way of seeing those DARWINs with a good combination of scores in the majority of the attributes, and that will therefore have a fairly high D-Score, is through the predetermined filters.
1. We access the filter 'Good Scores'.
2. We filter the DARWINs using the D-Score column.
Frequently Asked Questions
We are going to clear up some of the questions most commonly asked by our users.
Do the investable attributes and the D-Score grade the DARWIN or the underlying strategy?
Except the attributes regarding risk management (Rs and Ra), the D-Score grades the DARWIN that replicates the trader's underlying strategy.
How is the D-Score calculated?
To calculate the investable attributes scores, and the D-Score, we take into account the last 12 D-Periods of Experience, giving more weight to the more recent data.
What is the formula to calculate the D-Score?
The exact formula to calculate the D-Score is Darwinex's intellectual property. We can only tell you that each combination of scores has a specific weight in the D-Score.
Do you want to know more?
If you want to learn more about the D-Score, and how we can help you decide when it comes to investing in DARWINs, we recommend the following webinar presented by Juan Colón.