Exchange-Traded Fund (ETFs), and why everyone should study them
Exchange-Traded Funds (ETFs) are an alternative to mutual funds that still offer the benefit of diviservied investments, but can also be bought and sold throughout the day just as easily as an individual stock. ETFs have become very popular in the investment community over the years, especially with those looking to follow stock indices (such as the S&P 500), or otherwise invest in certain bond or commodity markets in a more simplified manner. ETFs are also well liked by short-term traders and investment banks.
ETFs can track just about any collection of securities - including stocks, stock indices, currencies, government bonds and corporate bonds, but ETFs can also be an investment vehicle for physical commodities or commodity futures contracts, such as oil, gold or silver.
ETFs can also employ very specific strategies and/or themes - such as long (bullish), bearish (short), dividend, value, growth. They can be designed to specifically serve as a hedge or as a means for speculation in higher risk investments.
There are two primary reasons for researching ETFs. First, just like any other financial instrument or security, comprehensive research can help investors and traders make sound financial decisions and because ETFs represent a significant transactional volume of global financial markets, researching ETFs can help provide valuable insights into broader market trends, investor sentiment, the asset classes, sectors and strategies behind market moves, and how it may correlate with global economic conditions. Secondly, if you choose to invest in or trade an ETF, it's helpful to analyze long-term patterns, trends and cycles, just like any other financial instrument or security you may choose to invest in or trade.
The Socrates Platform is a research tool offering investors a window into the patterns, trends and cyclical activity of global financial markets. Along with researching stocks, commodities, and bonds, our platform enables you to research and analyze ETFs from a technical analysis and cyclical analysis point-of-view. Before exploring how Socrates can enhance your market research, let’s unpack how Socrates works.
What Is the Socrates Platform?
The Socrates Platform uses advanced, proprietary computer models — the product of decades of research and development — to systematically apply technical and cyclical analysis to historical data of global financial markets. Our computer models generate unique content and indicators that offer unbiased insights into financial market behavior. Our platform also includes traditional technical studies and price charts across all different time levels (daily, weekly, monthly, quarterly and yearly), providing investors and traders with a clear view and broader perspective of market dynamics.
By leveraging our tools, Socrates Platform helps investors and traders uncover underlying trends across a spectrum of financial instruments, including ETFs.
Which ETFs Does the Socrates Platform Cover?
Socrates has data on over 1,000+ global financial instruments available to research (we call these "covered markets"). Of those, we have nearly 200 ETFs to research, including ETFs that track major stock indices, such as the S&P 500 Index, the NASDAQ 100 Index, the EURO STOXX 50 Index, and many others. Our comprehensive coverage includes a broad set of ETFs for bonds, commodities, and currencies available to research.
The Socrates Platform only includes markets for research that have been trading for a number of years, so there is a minimum level of historical data for our proprietary computer models. The more historical data a market has, the better our models can look for patterns, trends and cyclical activity. You wouldn’t plan your annual household budget based on one day, week or month of spending habits. Similarly, your market research should include analyzing long-term behavior.
Using Socrates to Research ETFs
The Socrates Platform enables investors to research ETFs using our proprietary computer models that employ technical and cyclical analysis methodologies to produce unique indicators that can help you identify market behavior you may be looking out for.
Starting with a broader perspective, Socrates offers tools for tracking how money moves between markets on a global scale. The aptly named Global Capital Flow Heat Map, for instance, gives you a high-level view of capital inflows and outflows across major countries worldwide. Our platform also supports multi-currency analysis of each covered market, which can help you better understand the potential impact of global economic factors such as exchange rates and inflation on market performance.
ETFs available for research in Socrates can also serve as valuable indicators of broader economic conditions. For example, ETFs focusing on corporate bonds, government bonds, including inflation-protected securities, such as Treasury Inflation-Protected Securities (TIPS), can provide insights into investor sentiment and perhaps market expectations for inflation.
Our Economic Tracker feature allows you to use the Global Market Watch and other models to follow GDP, CPI and other economic indicators from major countries (G7, etc). This can offer additional context when researching ETFs, or any other covered market available for research in Socrates.
Explore the Socrates Platform membership plans page for a more complete view of the features and research tools available in each plan. For an idea of what to expect, here is a bit more information on three core proprietary models available within Socrates:
1. Global Market Watch (GMW)
Available to all Socrates users, the Global Market Watch (GMW) uses pattern recognition algorithms to analyze the price movement of every stock available to research within the Socrates Platform. The GMW identifies repeating historical patterns and emerging trends, providing users with a ‘cheat sheet’ highlighting potential sharp moves or turning points in the market. As a starting point for research, the GMW helps you spot opportunities that warrant further investigation. 
2. The Reversal System
Available to Pro and Enterprise members, the Reversal System helps users research the question: "At what price level might the current price trend reverse direction?" The system identifies pressure points in market price that can be studied as areas of possible technical support (bearish reversals) or technical resistance (bullish reversals). These Reversal points can help you follow a market's price activity while also anticipating potential shifts from downtrends to uptrends, or vice versa.
3. Timing Arrays
Another tool available to Pro and Enterprise members, Timing Arrays highlight potential timing of cyclical peaks and troughs the computer models are picking up on that may be worth further research. Socrates users can study the Timing Arrays to help prepare for possible market turning points, changes in trends, and volatility.
Cross-referencing the Timing Arrays and the Reversal System can be a powerful combination when researching stocks. Reversal points offer insight into possible pressure points in market price, while Arrays offer timing considerations — giving you an idea of where market movements might occur from a technical perspective, and when they may happen from a cyclical perspective, as you study market behavior and develop your own strategies.
Use the Socrates Platform to Research ETFs
The Socrates Platform excels as a tool for researching ETFs of all types, including stock ETFs, stock index ETFs, bond ETFs, commodity ETFs and foreign exchange ETFs. Whether you are a passive investor, an active trader, a financial professional, or an investment banker who focuses on exchange traded funds, you can use the Socrates Platform to aid your research. Study price charts for trends, use the GMW to find patterns, use the Reversal System to find levels of technical support, technical resistance, and stand out as potential pressure points that may align with turning point considerations highlighted by the Timing Array cyclical models.
In addition to ETFs, Socrates offers hundreds of other financial instruments to research, including equities (stocks and stock indices), commodities (agriculture, energy, metals), bonds and currencies (foreign exchange) from around the world.
The Socrates Platform empowers users with unbiased, computer-generated information and indicators so they can research global financial market trends, patterns and cycles and make more informed investment and trading decisions.
Is the Socrates Platform Right for You?
Compare our different Membership Plans to find a version of Socrates that works for you.
While there may be an initial learning curve for novice users to understand the Socrates' computer models, the platform is intended to be easy to use and as you get more comfortable you can upgrade and tap into the full potential of Socrates as you research global financial markets.
