My costly lesson in chasing volume: the small-cap biotech trap

Thought I'd finally introduce myself with a mistake that sticks. Back in '18, I got caught up in a small-cap biotech play. The news flow was incredible, social media was buzzing, and volume was off the charts for a stock that usually traded a few thousand shares a day. My mistake wasn't just FOMO, but specifically chasing that volume thinking it signaled genuine institutional interest rather than a pump. I sized in way too large, ignoring the underlying fundamentals and the fact that most of the buying was retail-driven. The rug pull, when it came, was swift and brutal, wiping out a significant chunk of that month's gains. It cemented a rule for me: if I can't explain the why behind the volume beyond 'everyone's buying,' I stay out, especially in less liquid names.