Classic Wave: The Easy Way

Classic Wave is a simple strategy with few rules and no over-optimization. Despite its simplicity, it is backed by a nearly century-long historical track record, delivering excellent returns on the weekly chart of the SPX (TVC).

I also recommend observing its strong performance on the SPY (weekly), which is the perfect instrument for executing this strategy with futures in the future.


Strategy Rules and Parameters

When a bullish candle closes above the 20-period EMA, we place the stop-loss below the low of that candle and target a risk-reward ratio of 1:1.

A second, more profitable variant is to change the risk-reward ratio in the code to 2:1.

-Total capital: $10,000

-We use 10% of the total capital per trade.

-Commissions: 0.1% per trade.

The code construction is simple and very well detailed within the script itself.


Risk-Reward Ratio 2:1

Using a 2:1 risk-reward ratio reduces the win rate but significantly increases profitability.
Across the full historical data of the SPX index (weekly), the system would have generated 236 trades, with a win rate of 51.27% and a profit factor of 2.53.

From January 1, 2023, to November 28, 2025, the system would have generated 5 trades, with an 80% win rate and a profit factor of 9.244.


What makes this system so good?

-It takes advantage of the long-term bullish bias of U.S. stock indices and traditional markets.

-It filters out a lot of noise thanks to the weekly timeframe.

-It uses simple parameters with no over-optimization.


Final Notes:

This strategy has consistently outperformed the returns offered by most traditional funds over time, with fewer drawdowns and significantly less stress. I hope you like it.