Strategy Description: Have talked about this in trading review but wanted to go through it even further because I completely misplayed it!
Step 1: Anticipate how far down it could go as max pain. Base this off the news, and off the sector volatility etc, and the stock volatility - how far does it move on monster days?
Step 2: Trade feelers counter trend with a focus on locking profits and using wide, but not undefined stop-losses. Keep the feeler size very small (because of volatility). The goal of the feeler trading is not to catch the bottom and make lots of money, but rather to watch it a lot closer and lock in a tiny bit of money to be used as risk for a larger position once the trend is changing.
Step 3: Don't get fomo!!! Or any other emotions!
You can see on this VRX chart that once the trend had truly changed (around say $105) you could just put on multiple momo lots and trail stop-loss, and lock in a home run. But the key is to focus on not losing money prior to this moment, and to lock in a little bit to risk at this point where you confidence is increased.
Remember if putting size on the momo lots that you need to be taking profit quickly on some of the position and trailing stop-loss quite aggressively. Buy dips, sell pops and gradually increase position. Eventually if the trend continues it will turn into a monster!
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