Not a great trading day for me today, but a good learning experience. I suspected the sector move but traded poorly. Instead of ending the day up 2.5-3K, I ended up about 350 with a ton of churn. I probably made out with half of that net after taking commissions into account.
One thing that crushed me is I traded way too much size in $VTAE. These overnight gap up microcaps really throw me for a loop when it comes to position size. They're cheap so your first thought is to buy a lot of shares, but there's so much volatility. It turns out that buying 4000 shares of $VTAE is NOT the same thing as buying 8000 shares of $TCK on a day like today.
I waited off the open and it looked like there was buying in $VTAE. I accumulated some on a dip and added more, without realizing just how much size I put on. The next thing I know, the stock rips lower and I'm down quite a bit. I got a bit chopped up when I tried to flip it around to the short side. The thing is, I don't like shorting gap up stocks since they're still green on the day. The risk/reward just isn't there.
Going forward, I am going to really watch my size on these microcap low floaters.
Luckily, I caught a piece of the commodities sector move. I had expected Steel would lead since it led the last leg, but I was wrong.
What I should have done was spot the relative strength and focus all my efforts on $TCK. What I ended up doing was dividing my focus among $TCK, $FCX, $ATI, and $AKS. $ATI and $AKS were good winners for me, but I would have done the best just buying $TCK when I noticed that it didn't fill its gap up on the morning washout in $XME and $XME made a new high. That was a good, easily-captured 50 cents of upside that could have been done on huge size with no fear.
Today's experience has given me another data point for revising and improving stock selection and entry in commodities sector moves. I'll post on that after I think through the problem some more.
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