Detecting signals of selection in the genome of malaria parasites is a key to identify targets for drug and vaccine development. Malaria parasites have a unique life cycle alternating between vector and host organism with a population bottleneck at each transition. These recurrent bottlenecks could influence the patterns of genetic diversity and the power of existing population genetic tools to identify sites under positive selection. We therefore simulated the site-frequency spectrum of a beneficial mutant allele through time under the malaria life cycle. We investigated the power of current population genetic methods to detect positive selection based on the site-frequency spectrum as well as temporal changes in allele frequency. We found that a within-host selective advantage is difficult to detect using these methods. Although a between-host transmission advantage could be detected, the power is decreased when compared with the classical Wright–Fisher (WF) population model. Using an adjusted null site-frequency spectrum that takes the malaria life cycle into account, the power of tests based on the site-frequency spectrum to detect positive selection is greatly improved. Our study demonstrates the importance of considering the life cycle in genetic analysis, especially in parasites with complex life cycles.