Q: What is the Forex Verified Score?
A: The "Score" displayed in our test results is a proprietary algorithm that accounts for the net profit/loss, the duration of the test, and the maximum account drawdown. Instead of basing the score entirely on profitability, we felt it was important to account for drawdowns and the test duration too.
The maximum drawdown is an extremely important factor to consider when judging a Forex strategy. Imagine you have two strategies: the first averages 10% per month and has had a maximum drawdown of 15%. The second also averages 10% per month but had a maximum drawdown of 80%. Which do you think is the better system?
Our scoring system takes all this into consideration.
- We usually don't consider trading a strategy on a live account unless it has a score above 5 and test duration over 90 days (180 days preferred).
- All systems that have negative Profit/Loss will also have a negative score.
- The "score" is not an unquestionable standard of quality. Sometimes a relatively new test will perform great and receive a good score before it goes into a drawdown. That is why we don't consider trading a strategy live until the test has continued for a satisfactory duration.
- Currently we have NO manual overrides for the scoring displayed on the website. It is 100% automated so we do not personally control which systems are at the top or bottom of the list.
- A score of "N/A" means the test has been active for less than 14 days. Scores are only available after the first 14 days of testing to prevent prematurely high scores of strategies that got lucky their first few days of the test.