Rob Smith Interview: How Quant Edge Was Created – T3 Live
T3 Live

Rob Smith Interview: How Quant Edge Was Created


To help you get to know T3 Live’s growing bench of trading talent, we launched a new series called “Meet the Traders” so you can get a direct introduction to our team.

Today, we're talking to Rob Smith of T3 Live's Quant Edge program.


1) How did you first get involved with the markets?

My father worked for Merrill Lynch, and at the age of 15, I began working summers at the CBOE.

I worked there through high school and college, and then followed my Father to the Chicago Stock Exchange where I was a Member for 16 years.

2) How did you discover your 3 truths in trading?

I fist discovered that all price discovery works in a continuous series of Broadening Formations by watching a Fed Day.

Since they were almost always outside bars, I broke the action down into shorter time frames to see the broadening formations on a fractal basis. Then I started applying this framework to everything.

I was absolutely stunned that this occurred on all time frames in everything.

All books will tell you that this pattern is rare when in fact it is so prevalent it’s astonishing.

I noticed the power of inside bars during a period of high volatility in the silver market. The silver ETF AGQ was making 20-50 dollar movers and I notice absolute explosions off of inside bars.

Once again, I looked at everything across all time frames to discover these equilibriums, which indeed drive price action.

Time Frame Continuity was added at a time when volatility was low. Although inside bars would break, they wouldn't do so as much as when volatility was high.

This supplied the extra boost needed.

Let me be clear though: I prepared myself to receive the gift of these truths by looking at 2,500 charts a night for 20 years.

3) Are you concerned about high-frequency and algorithmic trading?

Not at all.

Some day, all trading will be automated, and that needs to be embraced.

You can adapt with the times or get left behind.

4) You've called the VIX ETN's your bread and butter. Why do you like trading these instruments so much?

Their attempts to mimic the VIX using back contracts, which bakes in inefficiencies and declines, is laughable, if not sad.

Since the VIX is the only indicator that truly reverts to a mean over time, the products will decline over time.

That gives us a lot of trading opportunities.

5) Recently, you Tweeted a picture of your 16-screen trading workstation.

Do you really need all those screens?

Although we use scanners and programs to follow my strategy, the visuals that charts provide make it easier to see things faster.

Because the equity market is so vast, I have a lot to keep an eye on, including sector, subsector, and stock relationships. Eventually, everything will be automated.

6) What is the 1 thing you wish you knew when you started as a trader?

I wish I knew the 3 truths about trading!

7) Do you do anything outside of trading that helps you unwind from the ups and downs of the market?

Kayaking the rivers is a great way to unwind — no traffic just nature!

I’ve also run 68 Marathons and 25 ultra-marathons, 2 of which I won.

Believe it or not, running marathons is a great way to sight-see new places!

8) What would you be doing with your life if you weren’t a trader?

I plan to start or work with a faith-based ministry to continue to help the poor and marginalized.

My faith is tremendously important to me, and there is no greater joy in life than using one's gifts and blessings to help others.

Click here to learn more about Rob's Quant Edge Program