I have been burned on the downside with this thinking as well: stock is looking like a great bargain at $9, buy it, oh now it's $7, buy more, now it's $1... hmmm, not looking so good now.
The only solution I know of to this problem is to cap your upside / downside. Ideally while collecting basis (i.e. covered call). Instead of looking at each trade as, "This one's going to be a home run!" set a limit of if it goes up, I'm selling at x, if it goes down, I'm selling at y. Have lots of small, diversified trades and be happy when you are making some money rather than disappointed that you could have made a lot more money.