If you do this strategy long enough, you are going to encounter a day in which you get spanked. It is unavoidable and just the nature of the beast. However those days are very rare if you are diligent in pulling stocks for news and you only trade stocks whose volatility you can handle. But you can never eliminate the possibility since sometimes a stock will crush you with no news on it whatsoever. You just have to prepare yourself mentally for the possibility. What to do? It's been said many times within these threads that once you are filled its just trading 101. If you find you are in a bad trade, you do what you can to try to keep the loss to a minimum. Sometimes the minimum will still sting.
Lescor wrote: <b>"What you do is estimate the worst case scenario, how much you think you'd lose on a "really bad day". Then double that amount. Determine your share size based on that and make sure you're ok with that much potential red some day."</b> Then copy these words to a word document, make the font real big, bold the font, and put it next to your computer.
I estimate that "really bad day" to be 20x my average day. Think I'm overboard? It's just a number in my head I'm OK with losing if everything goes wrong a couple of times each year (or should I think more often?)