Discipline with awareness on QQQ
How the Market Wave Algorithm for ETFs beat dollar-cost averaging in every window, by up to 368 percentage points across five windows.
Testing the most trusted advice in investing
We did not build a new model. We took the Market Wave algorithm our crypto clients already run, pointed it at QQQ, and measured it against the disciplined passive approach on the same ground.
The strategy: Market Wave. The unchanged trend and momentum algorithm. It rides confirmed moves, takes profit on rules, and steps to cash when the trend is not there.
The benchmark: dollar-cost averaging. A fixed amount of the same capital, buying QQQ on a schedule, never selling, ignoring price. The steelman of the index-fund playbook.
The full decade
Strategy+489.5%
- DCA
- +121.2%
The COVID crash entry
Strategy+149.8%
- DCA
- +48.8%
A true bear market
Strategy+78.3%
- Buy and hold
- +25.3%
- DCA
- +47.8%
The accumulation recipe
Strategy+48.4%
- DCA
- +6.6%
The cash yield recipe
Strategy+36.6%
- DCA
- +6.6%
Five windows. Two chart intervals. $100,000 start, zero shares. Ahead in all five.
Backtested results. Past performance does not guarantee future results. For educational purposes only.
The Boglehead playbook, and why we respect it
When Jack Bogle launched the first index fund, he turned a simple idea into the most trusted advice in investing: stop trying to beat the market, just own it. Millions of Bogleheads now run the same four rules, and for good reason. This is the discipline we set out to test.
Own the whole market
Buy a broad, low-cost index fund instead of picking stocks. Costs stay low and you capture the market's long-run drift.
Buy on a schedule
Dollar-cost average a fixed amount at set intervals, regardless of price. No timing, no second-guessing the entry.
Hold for decades
Never sell on the way. Time in the market, not timing the market, is what compounds a portfolio.
Stay the course
Ignore the noise, the crashes, the rallies. The whole point is to take human emotion out of the decision.
Our battleground: we ran the test on QQQ, the Nasdaq-100 and one of the great long-run wealth builders. We deliberately picked the passive movement's favorite index, on its friendliest terrain, so the comparison is as fair as it gets.
The same playbook, and its one blind spot
Those four rules earned their trust honestly. But the same discipline that protects a Boglehead from emotion also forces a single trade-off, and it is the opening an algorithm is built for.
What it gets right, and it is earned
Cheap, tax-efficient, and it captures the long-run drift of the market.
It solves the single biggest problem in investing: human emotion.
By removing the decisions, it removes the panic-selling and euphoria-buying that wreck most investors.
What it gives up to get there
It buys the same dollar amount at a euphoric top and a generational bottom, because by design it does not look.
It never takes a profit into strength, and never raises cash when structure breaks down.
One rule, hold and keep buying, with no answer for a crash, an overextension, or a flat decade.
The blindness is the feature that delivers the discipline. It is also the limit on what the approach can return.
What Market Wave actually does
It treats market structure as information, not noise. Three jobs, run on rules:
Ride confirmed moves
It enters on rule-based confirmation of a trend, not on a hunch, a headline, or a fixed calendar date.
Exit on rules, not nerves
It takes profit on defined triggers, banking gains into cash rather than holding through every reversal on principle.
Step aside in chop
In indecision and bear markets it holds cash and waits, exactly where the passive playbook keeps buying anyway.
One dial sets the recipe anywhere from accumulation to cash yield. The only other variables are the window and the chart interval.
Backtested results. Past performance does not guarantee future results. For educational purposes only.
“The full decade”
June 2016 to June 2026 · Daily chart
A decade of owning QQQ for the long haul
The algorithm built a position early and held it at a $175 average cost while QQQ climbed toward $724. The large majority of the gain is unrealized, the right posture for a decade-long secular uptrend.
+489.5%
- DCA +121.2%, outperformance +368.3 percentage points
- Ending value
- $589,502
- Realized
- $50,984
- Unrealized
- $438,518
- Total profit and loss
- $489,502
- Shares held
- 798 at $175 avg cost
- Cash on hand
- $11,686
Backtested from a daily-chart trade schedule, valued June 29, 2026. Past performance does not guarantee future results. For educational purposes only.
“The COVID crash entry”
February 2020 to June 2026 · Daily chart
Committing capital, then the floor falls out
This window opens days before the fastest 30% drawdown in market history. No human had to buy the March 2020 panic, and none had to resist selling the bottom. The rules did both, and still tripled the passive result.
+149.8%
- DCA +48.8%, outperformance +101 percentage points
- Ending value
- $249,843
- Realized
- $51,793
- Unrealized
- $98,050
- Total profit and loss
- $149,843
- Shares held
- 273 at $365 avg cost
- Cash on hand
- $52,169
Backtested from a daily-chart trade schedule, valued June 29, 2026. Past performance does not guarantee future results. For educational purposes only.
“The 2008 Great Financial Crisis”
October 2007 to October 2012 · Daily chart
The worst entry point in a generation
Starting at the pre-crisis peak, the algorithm stepped to cash through the 2008 collapse and bought back in on confirmation. The hierarchy holds the whole argument: buy and hold last, dollar-cost averaging better, the structure-aware algorithm won.
+78.3%
- DCA +47.8%, outperformance +30.5 percentage points
- Buy and hold +25.3%, outperformance +53 percentage points
- Realized
- $78,378
- Shares held
- 2,376
- Cash on hand
- $178,378
- Buy and hold return
- +25.3%
Backtested from a daily-chart trade schedule, valued October 7, 2012. Past performance does not guarantee future results. For educational purposes only.
“The accumulation recipe”
January 2025 to June 2026 · 4-hour chart · Set to accumulate
One algorithm, one dial: from accumulation to cash yield
The first three scenarios tested time and market regime. The final two test objective, and isolate a capability the passive playbook simply does not have. A single recipe value slides the strategy along a spectrum.
Accumulate: keep capital working in shares and build the largest disciplined position you can. Ends holding a large position in shares. Cash yield: harvest the swings into realized cash, for liquidity and less market exposure. Ends holding almost everything in cash.
The next two scenarios prove it the only honest way: same asset, same window, same chart, same benchmark. The only thing that changes is the dial. Both leave the passive baseline far behind.
The dial set to grow the position
Where a dollar-cost averager earned a flat 6.6%, the algorithm stayed almost fully invested the whole time. Almost the entire gain is unrealized, held in a 194-share position. The dial was set to grow.
+48.4%
- DCA +6.6%, outperformance +41.8 percentage points
- Ending value
- $148,425, mostly in shares
- Realized
- $1,485
- Unrealized
- $46,940
- Total profit and loss
- $48,425
- Shares held
- 194 at $482 avg cost
- Cash on hand
- $7,973
Backtested from a 4-hour-chart trade schedule, valued June 29, 2026. Past performance does not guarantee future results. For educational purposes only.
“The cash yield recipe”
January 2025 to June 2026 · 4-hour chart · Set for cash yield
The same window, the dial set to harvest
Only the recipe value changed from the last scenario. The algorithm finished with zero shares and everything in cash, working the market far harder: $333,807 in trade volume against the accumulation run's $101,714.
+36.6%
- DCA +6.6%, outperformance +30 percentage points
- Ending value
- $136,694, 100% in cash
- Realized
- $36,694
- Unrealized
- $0
- Shares held
- 0
- Cash on hand
- $136,694
- Trade volume
- $333,807
Backtested from a 4-hour-chart trade schedule, valued June 29, 2026. Past performance does not guarantee future results. For educational purposes only.
Five windows, one pattern
Each window measured against the dollar-cost-averaging benchmark that represents the passive playbook. Same algorithm throughout. In every window, the algorithm finished ahead.
| Scenario | 1 · The full decade | 2 · The COVID crash entry | 3 · A true bear market | 4 · The accumulation recipe | 5 · The cash yield recipe |
|---|---|---|---|---|---|
| Window | 2016 to 2026 | 2020 to 2026 | 2007 to 2012 | 2025 to 2026 | 2025 to 2026 |
| Chart | Daily | Daily | Daily | 4-hour | 4-hour |
| Strategy value | $589,502 | $249,843 | $178,378 | $148,425 | $136,694 |
| Strategy ROI | +489.5% | +149.8% | +78.3% | +48.4% | +36.6% |
| DCA ROI | +121.2% | +48.8% | +47.8% | +6.6% | +6.6% |
| Outperformance | +368.3 pts | +101 pts | +30.5 pts | +41.8 pts | +30 pts |
Every window started from the same $100,000 in cash. The do-nothing, all-cash result was 0% in every case. Scenario 3 also beat a buy-and-hold investor, who earned 25.3% from that unlucky 2007 entry.
Backtested results. For educational purposes only.
Awareness versus autopilot
Autopilot: dollar-cost averaging
One genuinely powerful rule: buy a fixed amount, on a schedule, regardless of price, and never sell. By design it cannot do three things. Buy more when structure is most favorable. Take a profit when the trend is overextended. Raise cash when the trend breaks down.
Awareness: Market Wave
The edge is that it looks. The realized-versus-unrealized split across the five scenarios is the fingerprint of that awareness. Built a position early in the decade, at a far better cost basis. Bought the COVID panic, stepped to cash through the 2008 bear. Converted chop into a built position or banked cash, on the dial.
That is the whole difference. The passive playbook removes emotion by removing sight. The algorithm removes emotion and keeps its eyes open.
Backtested results. Past performance does not guarantee future results. For educational purposes only.
Discipline does not have to be blind
- 01
The playbook is right about the thing that matters most
Discipline beats emotion, costs matter, and time in the market is powerful. It beat doing nothing in all five windows. None of this disputes that.
- 02
Its one limitation is self-imposed blindness
To guarantee it never panics, it agreed never to look at price or structure. On the friendliest terrain, that still left return on the table in every window.
- 03
You do not have to choose between discipline and awareness
A rules-based algorithm keeps the zero-emotion discipline and adds back the sight it gave up. One dial sets its recipe to the investor's goal.
The passive movement got the hardest part right: take the human emotion out of the decision. The next step is to do that without also taking out the information.
Backtested results. Past performance does not guarantee future results. For educational purposes only.
Rules-based algorithms, now on the index in your retirement account
Zero custody. Your assets never leave your account.
Full control. Pause, adjust, or stop any strategy at any time.
Rules, not reactions. A single dial sets the recipe anywhere from accumulation to cash yield.
On its own friendliest terrain, the disciplined passive approach was still beaten in every window.
The question worth asking: how much of your long-term capital is invested with its eyes closed?