That's an interesting way to put it!
When you're watching views, you only have a limited view of the whole process.
That third hand you're talking about is usually a pair of tongs that the smith is holding the metal with.
Or if they're working with a striker, it's a second person with a sledgehammer who does the heavy hitting while the first smith guides the tool.
For some jobs, a smith will even clamp the work in a post vise so they can use both hands for other tasks.