This invention relates to a method and apparatus of detecting and compensating for DC residual fault currents on electrical systems. In particular, the present invention relates to a method and apparatus which is capable of accurately detecting one or more parameters of the fault current waveform and generating a compensation factor which compensates for specific pulsed DC fault components present. In this way, trip sensitivity is optimized for all types of fault current waveforms. In a preferred embodiment, the present invention operates by detecting one or more parameters of the encoded fault current waveform and generating a measure of symmetry comparing the mean squared values of negative and positive sections of said encoded fault current waveform. In use, various bands of the ratio of the mean squared sum of the positive and negative sections of said encoded fault current waveform are obtained, and a compensation factor is determined from a look-up table stored in a processing means.