Interview with Trent Smalley from DTN/IQFeed
Hello, everyone. Welcome to another episode of Line Your Own Pockets. We have a guest today that you can see. So we have Trent from IQ Feed, which if you guys have been tuning in for some time, you already know that I have some experience in my Amni broker journey with IQ Feed, and and Dave's been using them for like a millennia. Dinosaurs kind of spat the data at you, I guess, at that point.
Michael:So Mhmm. We'll let we'll let Dave start, and we'll kinda introduce everyone and and get into it.
Dave:Yeah. So, yeah, I'm happy to have you here, Trent. So why don't you for people that haven't heard of you, why don't you introduce yourself? Tell them so just a little bit about yourself, and then then I've got some hardball questions for you
Trent:after that. Sure. I'll do my best. So forgot to put the CMT after my name. I am one along with Mike.
Trent:I have worked with DTN, is the parent company of the product IQ Feed. I started in 2007, actually two days after I graduated college the first time. And the reason I started there, I was, a sciences major, and I knew nothing about markets. I didn't know what a futures contract was. I didn't know anything.
Trent:But the president of the company is my older brother's best friend, and I was set to go to med school. And I was waiting for a friend to get in. He didn't get in. I always tell people, this is how serious I was about going to med school. I said, well, you didn't get in?
Trent:Well, then I'm not going to go. I had no idea. Like, I'll wait a year. Maybe you'll get in next year. We'll see what happens.
Trent:And so I thought about, you know, doing an MBA or something. My my brother's friend said, well, come work for me. We have opening for a position that, is within an active trader environment. And I was like, what are we trading? Like, baseball cards or what is it?
Trent:So I knew nothing at all. So I started, and he said, you know, if you enjoy it, you can stay as long as you want. But at the end of the year, I'm gonna assume you're gonna move on to something else. So all these years later, through umpteen managements, different ownerships, this little group within this bigger company that does a lot of different things with data analysis, me and one other person are still here from those days. And he's actually about to retire at the end of this year, which is going to be weird for me.
Trent:So we'll see, what I do continuing. But been with IQ Feed. I used to go on the road and, to different trade shows. The money expos used to be, like, in New York and in Vegas. And you guys maybe have seen some of those.
Trent:Yeah. I used to go do demonstrations of technical analysis software. Actually, of our other platforms called Profit X. And so I would do these demonstrations when I had a basic basic understanding of technicals. I knew some moving averages.
Trent:I knew a few indicators, the basics. But then I would get hard questions, like, from the audience. Well, what would you do here? What does this mean? And I'd be like, I don't know.
Trent:And so somebody told me, well, you should you should check out the CMT program. And so that was kind of my next step into that. I think I started that in 2012, finished in, like, '15 maybe. But really, really enjoyed the program. Met met a ton of good contacts in the industry and stuff and, so that's kind of where but I've been doing market data, the whole time.
Trent:So Okay. Great. So great way to meet people too is meet guys like you that have a need for it.
Dave:Alright. So I'm gonna start off with what's might sound to some of our listeners like a hardball question, but I know it's really kind of a softball question to you. So alright. You know, traders get free data with most of the brokerages they use. Why in the world are you even in business?
Dave:Like, why would anybody wanna pay for data from IQ Feed? That make any sense. Why are you even in business?
Trent:Great question. It is a great question. And so when I started, there wasn't actually that much free data around. I think you could get delayed data. I remember thinkorswim back when it had, like, the red.
Trent:It It wasn't green yet. It was like the think or swim was red. I have some old business cards from people.
Michael:Do you just date yourself? You date the heck out of yourself.
Trent:I know. I was 42 and, you know, I started when I was 22. So but it's a good question. And for everybody, you don't need it. Now if you're an active trader and you are trading that depends what you're trading, which asset classes.
Trent:When you get into very short term trading, especially in futures markets, you will come to understand that there are big differences in the quality, reliability of market data. One of the biggest things is that people always come to us is, well, I have Interactive Brokers or I have somebody else. And it's not so much the reliability that's the problem. The data feed always seems to work fine. But when I buy this indicator, you know, and I get into it and I'm in this trading room and somebody else is using you guys, we're getting vastly different alerts and signals.
Trent:Mhmm. And a lot of that comes down to how data is sent from the exchange, taken into the servers at the broker, and then sent out to the end user. So interactive interactive brokers for one. They use basically a form of data aggregation. So if you are looking real deeply into the tape, futures markets, you can get orders that come through as, alright, one e mini contract whatever it is, two e mini contracts traded here.
Trent:They'll group a a batch of those together and send it as one. And so
Michael:Is that why? Is it is it to like save bandwidth or or
Trent:They have so many customers that and data is not the number one thing that they do.
Dave:Right.
Trent:So that is kind of reason number one that you'll notice. People that find a need and that are most of the guys, I would say, that are IQ Feed users are full time. They've done the free thing. They had some success and then they wanted to get a bit more sophisticated. A second thing that is a big difference is the historical data.
Trent:A lot of the brokers and I haven't kept track lately, but I know a lot of the brokers have been limited in the amount of historical data that you could really pull, especially when you get down to the intraday levels. Minute data, we go back close to twenty years. Tick data, we have more than we today, you can pull six months of every single tick, every single trade. We have more than that stored. It's just the being able our data client that sends the data out.
Trent:It has to be efficient enough so that it will keep up. So we're looking at making more of that available. A lot of the market internals data, is something that is kind of unique to IQ Feed. We have it calculated every second. So guys that are looking at the tick and the trend, maybe premium index is the difference between futures and cash.
Trent:That's a big thing. And also being unbiased as to which, you know, third data feed. We don't care which software you use. So you can use it with NinjaTrader or MultiCharts or, you know, Amibroker, any of these different platforms out there. So I just tell people, if you're a portfolio manager and you're doing some ETF analysis, you probably don't have a need for it unless it's historical back testing or you need something like that.
Trent:But for guys that are short short term, you'll notice a difference. And a lot of it's in the volume.
Dave:So That's the that's the that is the reason that I switched. So this is years ago, just my history with IQ Feed.
Michael:Mhmm.
Dave:I started using Amibroker. I think I probably started using the IB data, and I just saw some discrepancies. And I was and I I I've initially switched to esignal. Mhmm. So I was using esignal for
Trent:years there. Competitor for Yep. Years and years.
Dave:And at some point, I wanted to get more historical data. And I think at some point, you guys added a lot of there was one point where you added very good support for historical data, and I could backfill way, way, way faster than with eSignal.
Michael:Yeah.
Dave:So that's what got me to switch. And just the reliability of the the having real time data from the same provider where I was getting historical data, it just made a big difference in my whole entire process of coming up with a strategy and then trading it live, which are two completely kinda different worlds. Mhmm. But to have that match up was just a big I mean, that's a that's a big reason I've been there for, I don't know, probably over ten years for sure.
Trent:I think I looked and you were about thousand fourteen.
Michael:Mhmm.
Trent:That sounds right. So when were you Yeah. How long were you with Trade Ideas? Probably
Dave:eleven, twelve years. Something like that. Okay.
Michael:Yeah.
Trent:Got
Michael:it. Yeah. And, you know, and it's funny because you you said the same thing. You you came to the same realization twelve years ago that I came to well, people can go back on the pod, like, six months ago where for me it was Polygon. I was trying to use Polygon.
Michael:And then Dave at some point just said, basically stop being cheap, stop trying to, because the thing that got me and the thing that I was really interested in is the, using the, like you mentioned, the back tested data, the old data from the same provider as the new one. And I was interested more a little talk, talk a little bit more about what you were talking about with the data aggregation of it, because I think a lot of people think that in, especially in 2026, that data should be really easy to get and really simple and really clean, but they don't understand how archaic kind of the background systems and everything that keeps the market going. So you just talk a little bit about that, about the complexities of how to to pull this out of like an old dinosaur and try to, you know, get it to people in a reliable way.
Trent:Yeah. So the framework of how and it has changed a little bit over the years, and it's different if you're looking at equities markets versus futures. So futures, one exchange, like, just take the CME group. Right. If you have futures data from the CME group and you have our service, so you get it directly from CME or someone else, it's going to come from the same place.
Trent:You're going to see the same trade price bid ask. With the equities data, the market's fairly fragmented in that. There's a consolidated tape association, which is who we use, and that basically takes all of the data, the different trades that go across Nasdaq Market Center, NYSE, ARCA, all the other books, Edge, BATS. Some of these things have changed too. But so the the way it basically works is the exchange sends data directly to what we call tier one data providers, which is people like us who take the data direct from exchanges, and then we bundle it into which is done by our data client called IQ Feed Data Client.
Trent:It's a Windows executable file. You just it's a small download. You install it. But it basically compresses data into a format that makes it so it doesn't completely eat up all of your CPU usage. Because if you use the options market for an example, we'll get people who call all the time and they're like, want data for all the options.
Trent:Like, are you sure? All? There's, I don't, four or 500,000 quotes. Like, if you every you just pull up SPY, the full option chain, hundreds of symbols for strike prices and now with zero DTEs. And so the options market has expanded, you know, hugely.
Trent:So when people are looking for something that they can use on a regular desktop computer, not a supercomputer, something that you can go buy at Costco today, and it doesn't completely freeze your entire system. We can bundle that into a consumable format that'll work with all these third party softwares. If you're a developer, we have an API for that. And it makes it about as efficient as you can get what I would call, and I don't like using the term retail trader. It always over the years.
Trent:I think it's changing a little bit, but they got
Michael:a It's a bad pejorative.
Trent:Yeah. It is. But, like, retail traders beat the socks off of most institutions like the last couple of years. So don't yeah, don't I'm I work with institutions and I work with retail. I manage money for people and I work with retail.
Trent:And retail are some of the most sophisticated investors or traders, that there are. And it's because they have to make it work. They have to make the livelihood from it. But to be able to take a data feed that has so much incoming data, and we send data down to the tick level, which the last several years, the market's actually changed. Most of the exchanges change from, millisecond to microsecond timestamp, and you can get that with us.
Trent:And it works on an everyday laptop that you can go buy straight from the shelf. So it used to be where you had to have a pretty solid setup, you know, otherwise you'd get data bottlenecks. So in other words, price won't change for a couple of seconds. Then all of a sudden, you'll just see this huge blast of data that comes through. And then you check your computer resources and you see your systems at 90% or whatever.
Trent:We make it efficient so that you can do some powerful stuff with an everyday machine. So
Dave:Yeah. I can it's it's hard for people who haven't seen behind the curtain of data feeds and and what comes from the exchange and this the option trades that you talked about in quotes. Yeah. It's it's hard for them to appreciate just the architecture that has to be in place for this to work smoothly and as reliably as it does. Yeah.
Dave:One of the things you were you mentioned that I wanted to ask about that you sort of alluded to, sometimes you'll see bad ticks in a chart, and a lot of traders don't really know what that means or really what that represents. Can you talk a little bit bit about bad ticks and how you guys think about them and deal with them? And what exactly is a bad tick that you see on a chart?
Trent:Yeah. So I haven't ever seen an exchange define what they think a bad tick is, but they happen. And so sometimes, I mean, you can go back. I was just looking at a chart this morning. I don't remember.
Trent:Think it was a chart of Solana crypto. And there was one day, and I cross checked this through. IQ Feet doesn't have spot crypto data. We have the futures and ETFs and stuff. We might we're gonna try to get it.
Trent:But I was looking at TradingView, and that was it was, like, way out. It was trading at $80, and it was trading at a 140, and then it was right back. And that's still on there, and this was weeks ago. And so I don't I don't know that the exchanges actually define what a bad tick is, but we have some definitions around it, whether it's a standard deviation way above or below the current best bid, best ask price. And they'll come through.
Trent:And if our framework basically identifies it, and it's going to be after the point. So we in order to make sure that the data doesn't have any increased latency, we don't filter those out on the spot because that can slow down the data flow. So after it comes through and it's there, generally, we run our developers run a check to make sure that, alright, if this is way outside the normal range, this can really mess with somebody's, you know, technical indicators or or alerts that they're using. We'll go through and remove it. The exchange used to send I don't know if it was at the end.
Trent:I think it was at the end of every day they would say this trade was they'll send trades that are out of order. And then it's basically on you as a data provider to decide if you want to go in and change that. And so I don't I've seen them happen more smaller stocks, more of the speculative stuff. I don't exactly know how they happen, whether somebody puts like a lot of times in super volatile markets, what I'll do is like, I remember during COVID, I'd go through and I'd just place limit orders way under the market just to see if something would hit. And I think it probably happens because of some of that.
Trent:Somebody will just have a weird order out there and they happen a lot in the individual. If you chart an option contract, which not a lot of people do, they'll trade options based on, you know, the underlying stock or ETF. But you'll see it a lot in options markets because somebody that doesn't know anything doesn't know, maybe this is a strange biotech stock and it does have options, but the bid will be a dollar and the ask will be $8. And so those sell at the market. Well, then some other guy has a limit order out there that, you know, it's like, I'll buy it if it's a buck or 90ยข.
Trent:And so there you get a weird match. And so you get it looks weird on the chart. You have a huge spike up and then nothing. And so we do our best. There's not a real consistent way to say that's bad.
Trent:That's a bad tick. But we go through and remove them based on like a standard deviation profile of too far outside of the most recent historical. Yeah.
Michael:See, it's it's funny because people quite often just look at those ticks and either ignore them entirely or I don't know if you heard a lot of the conspiracy theories around them that this is like where the real guys are trading or something like that and and don't put a lot of thought into the fact that
Trent:It's James Streets moves probably.
Michael:Citadel gets to trade Citadel's in there.
Trent:Stealing your lunch bunny.
Michael:Yeah, but the, again it just, it shows to highlight how the market is, because it's been kind of just kind of cobbled together over the years everything does, that happens in the market is like stacked on top of something else. So it's like you have an old building and instead of gutting it and making a new one you're just putting layers on top of it. Yeah. All of Yeah this and all this stuff just has to kinda happen in the background for the base, even the most basic stuff we do is be able because like you mentioned, if if we were back testing and it was showing that you were getting filled at some of these insane prices, then you could create a back test that looks absolutely amazing. And then you go to trade it and you never get anywhere near because it's like, oh, yeah.
Michael:You could have gotten filled, you know, five standard deviations away from the price was good for you. I don't know if
Trent:you guys remember the flash crash in 2010. Mhmm.
Michael:Yeah. I was there.
Trent:I was on a customer call when that happened. And I looked over at my terminal. I was like, I thought it was like a terrorist attack or something terrible.
Michael:I think that's what everyone was.
Trent:And I think it was just a breakdown of the infrastructure that runs these markets. And it's hard to believe that, like, these things can still happen. Like, was it really did they determine it was a fat finger trade or what, you know, of snowballed, but these things will snowball. And then I know they went through and like canceled some of those orders that, you know, still happen.
Michael:Even it was what last year or two years ago where like Berkshire Hathaway was trading for a buck or something. I don't know if
Trent:you
Michael:guys remember that, but everything got all screwed up again where I remember reading on Reddit every someone going, yes. And then Yeah. They learned about busted trades after that. Yeah. Yeah.
Trent:I mean, these things happen. It's okay for congress to, you know, trade two minutes before a tweet. But Mhmm.
Michael:Have this. But, yeah, not us. Not us. That's for sure.
Dave:Is kinda you know, being in technology so long, it is kinda surprising that it happens happens so infrequently. Right? I mean, I've I've I've programmed enough software and have been around software and systems enough to know that, hey. Things are gonna happen. There's mistakes that even with, you know, very, very reliable systems, things break down.
Dave:So it is kinda it's kinda surprising that you don't see more bad techs than you do.
Trent:Yeah. And you guys know that, three weeks or a month ago, we had a major outage, with IQ, and it is so rare for it to happen to us. Outages happen for a variety of reasons. The exchange has outages, not like a full outage, but they have an outage in when they're sending their data to data providers. And usually you'll see those on Twitter.
Trent:Like if you follow NYSE or any of, you know, people who follow the framework of how these things happen, they usually get in front of it pretty quick. Data outages can happen because of your data provider. And when I say because of your data provider, that can be a number of things too. It could be the servers. It could be the network.
Trent:It could be a number of things sometimes. I've seen it happen where, like, it happens only on certain NYSE stocks that come across on a specific channel. So it may be symbols a through h that are messed up, or maybe the volume gets messed up because data comes through different channels, whether it's an index of a data, whether it's the volume, whether it's fundamental data. So we had a we had an outage, which was the first major one since I've worked here. There's been small outages.
Trent:We had one in the options data, like, 2010 or 11, but nothing to the extent that we had. And I think the thing I almost equate it to I don't know if you follow the company CrowdStrike, big cybersecurity company. Two summers ago, they had that massive outage. And it was also like, we're not as big as CrowdStrike. We're not probably as important as CrowdStrike is as we saw.
Trent:But I think the thing with those things is is you just gotta get in front of it, learn from it. It was such a simple fix. The issue was just like nobody knew exactly or what happened. And so you learn from those things and they they'll happen to every data provider. I remember during COVID, like I couldn't log in to think or swim half those days.
Trent:And so, yeah, nobody understands the importance of market data until it's not there. Yeah. And then they're like, uh-oh, what do I do? If you're in a trade, like and you can't either your data provider like us not showing data or your brokers down, you can't get a trade off. That's scary.
Trent:I mean and those are days you learn from.
Dave:So Yeah. Well, you know, I'm glad you brought that up. You know? And I'm it's gonna sound funny, but I'm glad you had the outage because the traders that I work with are you know, I I don't work with anybody unless I can see I'm really confident that I'm help them make a lot more money than they're making now. Mhmm.
Dave:So the trades I work with, you know, they're making 6 or 7 figures a year in profits from their trading. And one day, not being able to trade is a big deal. So having like, it's it's caused some good conversations of, okay. Well, this this this went down. What other things could I be vulnerable at?
Dave:Like, what should my plan be for if this goes down again or if something else happens? I need to think about redundancy. So there's some bits of good conversations. The other thing I'll say about it so one of my really good friends is a jeweler, and he sells custom jewelry. And I remember him telling me one time that his most reliable customers are ones that have had a problem with something they ordered and then call back in, and he was able to, you know, give them exchange or, like, figure you know, get to the bottom of the problem, help them be satisfied.
Dave:So it's not that they're it's not that somebody needs to be perfect. It's really how you respond to these outages so that you know so now people have a sense, Okay. I know that the communication was really good when you guys had this outage. They weren't trying to hide it. Like, I know things come up.
Dave:You know, things happen. Yeah. But I know that they're gonna handle this properly. They're not gonna hide the fact that it happened. They're gonna get better as a result of this.
Dave:So I think the way you guys handled this was really good, and it's caused, like I said, some really good conversations among the traders I coach.
Trent:Yeah. And it's funny too. One of our internal managers said, it's almost good. It's horrible that these things ever happen, but it's it had been so long. In fact, one of the maybe the very first educator partner of IQ Feed.
Trent:He is now 92. He has been with us since we had data from a satellite. So you would take a a DIRECTV style dish, put it on your house, run a line to a box that we sold, and you and then plug that into your computer. And data came over satellite. And he said, was with you.
Trent:I when I first started, we sold a few of these yet to people who couldn't get reliable Internet. He said, I remember two outages. One was on the satellite. I remember your options outage. And now I know this one.
Trent:And they've all been spaced about fifteen years apart. He goes, I'm 90 now, so I'm not gonna be around for another one. So I know I'm in the free and clear. And that was nice to hear on a very bad day for for us where, you know, we're known as the person who never you have to worry about. It happens to everybody.
Trent:But I think we needed I we needed it because because we've had a lot of management changeover over the years. And what it did was, as I mentioned, DTN does a lot of other things in agriculture science and refined fuels. It renewed a focus on like, hey, if you don't water the plants, they could something could happen. They could die. And this thing has been running on autopilot without it's almost like it's so good.
Trent:You don't have to worry about it. But then you got to make sure that your eyes are dotted and T's are crossed because it's a big deal when you have 15,000 customers all calling at one time. And that didn't just affect IQ feed. It affected products that that get data for, you know, spot corn markets and refined fuels markets and everything else. So it was a it was a day to remember.
Trent:That's for sure.
Michael:Well, like how you mentioned to the, you know, going back with the the satellite, right? I I'm not that quite old, but it does go to show how much easier I think we have it nowadays for a lot of these things because, know, you go back to people reading the actual physical tear tape and that's how they got data. And then, you know, before when there was 56 ks modems and you know, your sister picked up the phone and it knocked you off whatever video game or whatever you're playing and then satellites and now, you know, fiber optics directly to your house. It's just shows
Trent:that You just have to you call a broker to ask them for a quote. Yeah. Could you imagine placing and
Michael:then it was like $50 to place a trade and now it's
Trent:When I first started in the business, I think it was, I it was 15 or $20 for an in and out. And if you put, I think, $5,000 into TD Ameritrade, you got, like, 20 or 30 free trades. And now if anybody charged a 20 or $30 commission they would be like, you serious? $20.30 cents. I'm looking, you know?
Trent:So it's a different world than when it's changed a lot.
Michael:So, you know, going, I guess, down that road of how things have have kind of happened over time. One question I really wanted to make sure I got in, which is something we've talked about in the podcast few times and seems to be just rapidly approaching. Is this tokenization and then slash twenty four hour markets and expanding all that out? And I just wonder how much more of a pain that will be for you if you guys have plans to to deal with it because it seems like there's, you know, NYSE is opening like a parallel market and then there's this Blue Ocean Exchange that's got this parallel market. And we're not we're not making things easier to generate data.
Michael:It's not like there's one road that's gonna get us to this twenty four hour market. It's like everyone's coming at it from a different angle. And eventually we'll be there whether we like it or not, But it's just the way we're going about it just seems like we always do with markets, incredibly complicated and like disjointed.
Trent:I've seen there's been some and not that it's a bad thing for sure because a lot of the markets we have now are monopolies. But I've seen some exchanges that have tried to come in over the years. They had a little success, but they just never got the volume. There's an exchange. I don't know if we're going to continue to offer.
Trent:It was called the small exchange. And there we
Michael:actually worked with them. Yeah.
Trent:Okay. And I don't know if they're still going to continue, if they're kind of wrapping that up. I haven't heard, but we offered it. And I was excited for it because especially like when the micro contracts came out instead of the minis, I was like, well, this is a great way to somebody who wants to trade futures and they're, you know, underfunded. Many people when they start, they think they're gonna fund an account with $2,500 and turn it into a million.
Trent:You learn real quick. It goes against you, you know, five ticks. Uh-oh. So I thought, well, the micros, that'll give you a chance to actually work with the system with real money because paper trading, it's all right. It's better than nothing, but it's different when you have your own real money on the line.
Trent:Absolutely. And I think we'll probably see a little bit more of that, but I've seen I know I don't know if you remember Nadex. I think they were binary options. I'm not sure if they're still around. Popular.
Trent:It was like, you could place a bet at the end of the day, will oil be here higher or lower than here? So it's kind of almost like poly market, but it was still betting on markets. We're getting a lot of questions about, you know, these other betting markets. Like, are you gonna do data for that? And we'll see.
Trent:We're never gonna be the first adopter with stuff like that because it takes money and and time and human capital to to build out something that you hope it's still around. People ask me, probably been ten years ago now, if we were gonna get crypto. And I said, we need it. And the project managers at times, like, it's a fad. I'm like, oh, yeah.
Trent:He's no longer here. I should look him up and say, what do you think now? Still a fad. There are people that said the Internet was gonna be a fad. So Well,
Michael:you know saying that with AI too. Right? Same same
Dave:thing. Sorry.
Michael:It's like, I know this thing's you know, this thing misspelled something, so it's off when garbage It's garbage.
Dave:Yeah. Yeah. Well, I can tell you're kinda discerning about these things because I look at your website, and it looks like it looks like it was made a long time ago, which
Trent:'98.
Dave:I believe. I have a contrarian view about. That that means you're focused on the right things. I mean, I I think that's probably a very good website for a data provider that, you know, needs to be reliably and reliably up. And
Trent:Yeah.
Dave:If you're going for the latest fad to make your website prettier, then, yeah, I would Well, the other thing
Trent:too is is, there have been a lot of not just exchanges that have come and gone. There's been a lot of data providers in the past ten years that guys that we used to compete with that are no longer, like I don't I don't even think eSignal provides individual data feeds for, like, third party softwares anymore. They just got out of the business.
Dave:I think they still do, but you could you can't tell that from their website.
Trent:Yeah. Yeah. I've heard from some of our customers, like, we we've, you know, had you and eSignal for years. We like to have an redundancy, and eSignal is gonna drop coverage for this particular software that I'm using. I mean, it's a lot of work doing this.
Trent:At the end of the day, you're basically doing the exchanges dirty work. We have to charge our base fee covers people like me, and it covers telco costs and it covers server maintenance and all that. But then you have exchange fees and the exchanges charge used to be for years. Exchange fees were pretty much flat for a long time, and then they all became public companies. And then there weren't really the pits anymore.
Trent:And so now if you look at the financials of like most of these exchanges, market data becomes a bigger piece of their revenue pie. And so every year, you can pretty much bet an exchange fee is gonna go up. And, you know, they're they have a monopoly on things, and I don't expect that to probably change.
Dave:Alright. So I've got a question about your I know you offer an API, which I've used before and and coded some stuff with my own training software. And you also have plug ins for Amibroker and other software that you've mentioned. How do you think about that business and as opposed to just your data feed, like, for I p a I mean, API user versus an somebody that's using it as a plug in? And also for the plug ins, how much do you, as a company, help the the providers create the plug in?
Dave:Are you doing some of the work? Do you reclot or, you know, rely exclusively on them to do the work? How how does this whole thing work?
Trent:Yeah. So we do separate developer support for anybody who subscribes to our API. And so the API is it really gives you a lot more flexibility. So if if somebody gives us a call and they're like, look, I have this strategy I'm trying to figure out. Maybe it's a back testing strategy.
Trent:I'm not a developer. I usually try to I've done this long enough that I can usually push them to a software that would prop like something like Amibroker. You can do so many things with that. Like, you don't really need to develop your own software. You if one of the there's about 30 or 40 major third parties out there.
Trent:They give you a lot of capabilities depending upon what you're trying to do. But if it's something that they've kind of searched around, most of these softwares offer trials. We offer trials of our data feed. But if it's something they really can't find that another software will do, I kind of tell them a little bit about the API. And if they say they're not a developer, we don't do the development work for them.
Trent:We have actually a partner called Laramie and Associates, Jay Laramie and his, I believe, son now. They are very, very familiar with IQ Feed. They've used IQ Feed. They have done a lot of development work for somebody that comes to us. They have an idea.
Trent:They want to build an app. They just don't know how to code anything. And so they'll do some contract work for people that that want that. So over the years, I mean, in our API, you do have some sample documents, applications in, like, c.net, some of the major ones. But Python, obviously, now is pretty much your most popular.
Trent:There's, like on sites like GitHub, there's current and past IQ Feed users that have just put their applications on there for other people to see. So there's a lot of support out there for guys that wanna do some development. Think we have, like, a couple thousand, 3,000 API users at, you know, any one time during the year. So it's a there's people it's getting more and more popular folks doing their own development than it ever used to be. I think that's a little bit to do with Claude and G.
Michael:Yeah, that's what I was going to bring up because we talked a little bit about this, you know, off stage before we got started. But the the fact that we, you know, me and you are both CMTs and have come from that world and the trading world and the finance world can get deeper into something that would need like a proprietary data source because we're not just buying an off the shelf solution that has everything contained within it and using like a GUI interface or anything anymore, which is something that would be have been way more off limits two years ago. And, you know, fast forward another two to five years, and it might be to the point where, you know, you can you can do so much more with these things. But at the end of the day, the the core is the data. And and like we've been talking about, it's not just, you know, you go and you call the NYSE and you you get their data and everything works.
Michael:All this background cleaning and everything that happens ends up being super important. So that's why I think you're probably seeing more and more of this is because you can just have guys like me who are like, oh well this is interesting, let me go in and kind of pipe and and figure it out knowing that I've got this, like, super intelligent assistant that will help me along the way. Whereas before that would just be something that would be just completely impossible to even even start thinking about.
Trent:And I think traders have just gotten more sophisticated over time. I mean, there'll there'll be a lot of times where I'm sitting around and I'll think whether it's with fundamental data or or just trading, I'll think, I wonder if there's got to be a correlation here. Like, I wonder if you could find some alpha if I did this. And then I'm like, I don't have the time or the patience to try to learn how to code. Like, I started down the road with learning some R and I got bored with it and it's just not my bag.
Trent:So I always said, I wish I had, like, a guy that just sat over there that I could just as soon as I have an idea, like, hey. Could you do some data analysis on me and see if there's anything there? And I think now with Claude, you basically have that. Yeah.
Dave:Yeah. True. You know, I've resurrected my API access to IQ Feed, and that's one of the first things on my list is to create some utilities that Clawd can quickly interact with. So, yeah, if you're on my mailing list, any listeners maybe by the time this airs, I'll have some some some things to share there that that I think will be really cool for Cloud users.
Trent:Yeah. And the the first app that you write that works really well, you're gonna send me first so I can make sure. Yeah.
Dave:Got some now I've got some traders now using it and testing it. So, yeah, I'm happy to send it to you.
Trent:There we go. It's pretty good.
Michael:And that's what I was gonna ask ask you is saying, okay, so now what just for the audience, any any of these ideas that are milling about your head that you're okay with sharing is just, you know, what do you think? Because I think you're gonna have an even more unique look at this using AI and using the ability to do it because you're kind of looking at the data kind of from its source. What we're searching for all the time is just some sort of inefficiency, right? Something that you know is broken that we can take the other side of and we'll end up working out. So just, you know, we can be as vague as you want, but you know pretend you're someone who's just getting started or just getting into this kind of systematic or quantitative world.
Michael:Any suggestions or ideas of kind of where you would point them out to to say, here is kind of a good place to start exploring for edge.
Trent:Yeah. My first my first thing that I always tell people when, you know, I'll have long conversation with guys who will call in and they'll say, I have this idea. I don't want to tell you about it. I'm like, that's fine. I don't need to hear about it.
Trent:But I always tell people, if you do find something, it's not going to work for very long and it's not going to work all the time. And so don't ever think that your idea is not good because it's not 100%. Most people, if you're shooting 65%, you're doing pretty well. And as long as if you're trading, if when you make money, you make more than when you lose when you lose money. So, you know, just how understand probabilities, understand position sizing.
Trent:But my favorite things that I like to do is I like to go back and look through the library of technical indicators, just stuff that you buy a big, meaty technical analysis book and look through stuff like RSI, commodity channel index, you know, MACD, all that stuff. And just try to see at whatever time interval you're looking at. If there's something there, maybe combine it with a couple indicators, but you have to put quantitative framework around that. So you have an idea, like, okay, I can see on the RSI is oversold or it's overbought. So what does that mean?
Trent:I like to look and say, okay, over the last ten years, this stock I know to be a quality company. Then the the quality companies that are on my list are all based fundamentally. It has nothing to do with the chart. Nothing. But there are some very, very interesting things when you have a list of what you know to be quality fundamental criterion.
Trent:Usually that comes down to high returns on invested capital, high margins, decent growth rate, good management team that buys back shares when things get undervalued. And you look at a couple of different technical indicators. I don't know if I've found anything so much as I've found where institutions like to institutions that look at a quality framework like I do from a fundamental standpoint, if that's where they're looking to step in and buy. A lot of it has to do with free cash flow yield and stuff that can almost work as a technical indicator. So I'm trying to what I'm trying to do is I'm trying to since I'm both a fundamental guy and a technical guy using technicals to get in and out of positions, I like to see if there seems to be some sort of a marriage between, alright, the fundamentals now show that this quality company is cheap based on historical standards.
Trent:Cheap doesn't always mean I don't mean like cheap as in low PE. I mean, it can be a very high PE and the company can still be cheap. But where does that fall into? Is there kind of a combined connection with now the fundamentals are looking, the guys that are fundamental analysts that are interested in quality investing. Sometimes those things happen at technical places on charts, long term charts, not daily.
Trent:You got to look weekly, monthly. There are something there which tells me either that the guys who are fundamental by nature, your Buffets, your Ackmans. Mhmm. They're using technicals to some extent, I think.
Michael:Oh, of course.
Trent:Yeah. I mean, we know the goat, Druckenmiller. He's upset. He's been a technician forever. But I think that there are either maybe they have technicians that are traders on their team and they are like, help me get the best price for this thing.
Trent:Because we forget that you and me wanna go buy a stock. We go buy the stock. If you've got billions to put to work, you're not going into your Schwab account and saying, yeah, give me 3,000,000,000 here.
Michael:No. You're not hitting the market order button.
Trent:So I don't know exactly if I found something, but the other thing I think that's really interesting, it's hard for traders to wrap their head around is as fast as markets have got and as short term as everything has gotten. I think there's huge alpha going back to being long term. And I don't mean investing in index funds. I mean buying individual companies on long term charts, long monthlies.
Michael:You're making Dave cry with that one. But I I I agree. Dave's all about the Patience comes into play. I mean, you
Trent:know, as technicians, people are always like, well, the chart's going down. This can't be good. Well, I bought Bitcoin in the throes of hell, and it was in a deathly death spiral. It was actually around Mount Gox time.
Michael:So Oh, okay.
Dave:I still
Michael:have them. That's old school.
Trent:Yeah. And so I've never I've been through. I always treat it when I first bought it as like dead money. Like if this works someday, great. It's a beach house or it's zero.
Trent:I don't really care. Then the numbers got bigger. And then it gets a little bit harder to stomach. Like what's the next thing? Then it was bankman freed.
Trent:And I'm like, well, I'm an idiot for not selling again. I feel like an idiot again today. And I'll feel like an idiot again, you know, in a few years when the next thing happens. But I think there's something to be found if you marry technical analysis to fundamental analysis on a long term basis. I'll let you know if we get back, we'll do a show next time.
Trent:I'll let you know if I find something. I love the deal. Notice is these this quality framework that I use, these companies rarely go on sale. The last time they really they are some to a certain extent now. But last April during the tariff thing, I was like, some of these free cash flow yields of these companies and what I look for with free cash flow yield is make sure it's at or higher than the ten year interest rate.
Trent:That's what Buffett Buffets. If you go back and read all Buffets letters, he used to call them equity bonds. Basically, buy a bond, you know, you're going to get this cash flow. What if you can buy a company that's increasing retained earnings every year and it's at the same free cash flow as a ten year bond that's risk free. So I've read a lot of stuff, and I try to figure out if there's something in the technicals that tells us now's the time.
Michael:Well, and then what I like about that, I think is important is you mentioned just the combining of disciplines. I think in in most cases, right? I would say a lot of people that are combining some sort of news flow or fundamentals with technicals and I think what me and Dave do could be quantified as you know combining technicals with actual, the data and quantitative side of things. Because a lot of our ideas will generate from looking at charts and looking at how price action moves and things like that, and then going back to tests. At the end of the day, I think you're a 100% right in in, you know, it's like kind of mixed martial arts, right?
Michael:There's no Yeah. Pure anything that is usually the best thing. It's it's some combination of of multiple factors put together that ends up being the secret sauce, and that's gonna be a little different for everyone and and kinda how they see the market and how what things they gravitate towards and and what things interest them.
Dave:Yeah. There's lots of different ways to make money in the market and, you know Yeah. Everybody has their own skill set and it's really about, you know, not finding the secret, but your secret and your the way you can uniquely provide a unique edge for yourself in the market. See, I love I love this. Yeah.
Dave:Love that you've come on here, Trent. Appreciate this.
Trent:Yeah. For sure.
Michael:Yeah. So how do how do people, you know, shout out time. Right? So how do people find you and find IQ Feed and then what do you want people out there to go check out and all that fun stuff?
Trent:I mean, you can look at our very old website, which is iqfeed.net. Mhmm. We actually have a new IQ Feed website. It's it's from our dtn.com page. It's a little bit hard to find because they're still finishing building it up.
Trent:But we got a we got an overhaul finally. But I like the old IQ feeds that I can find everything well, everything works. It's easy to use. So if you're looking at market data, there's two of us in the group. We work together to help people with market data there.
Trent:Our port my portfolio management business, my partner, Ryan Morris, is jspmllc.com. Currently, we're doing that website too, but we are a RIA and a CTA. So we're a commodity trading adviser as well. So Ryan runs our future strategies. I'm almost done with the CPA program, so we'll be doing some tax advisory stuff as well soon.
Trent:So that's kind of who I am and where you can find us.
Michael:Awesome. Well, thank you for coming by. Hopefully we'll have you back soon. It's super cool to I like CMT's teaming up against Dave and talking about long term shots that
Trent:always No, we're going to get Dave to go through the program. That'll be next. Wait. C A I A. Isn't that like a discipline you guys would be interested in?
Michael:The CAIA. Yeah. I've got that too with the
Trent:Oh, yeah. You did that one too.
Michael:I did that one in my head twenty days.
Trent:CPA. So my wife's not gonna let me take anymore.
Michael:No. Why not? It's four letters in the chai. Right? So really, it could boost Yeah.
Michael:You know, in the end, you're you can keep pushing them out. Don't go after the three letter ones. You go after the four and five ones.
Trent:That one actually seems really interesting. Maybe I'll do that.
Dave:The only acronym I'm interested in is PNL.
Trent:So There Doctor PNL. There you go.
Michael:At the end of the day. So, yeah, again, thank you very much for coming by. Absolutely. Rob. Always, I'm Michael Nauss.
Dave:And I'm Dave Mabe. We'll talk to you next week on Line Your Own Pockets.
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