I suspect there may be a flaw in your logic here. There is no proper entry, exit, re-entry mechanism.

f current_price > (1.01 * average_price):  

OK so far: you enter.
But then:

lif current_price > (costBasis * 1.01)  

This can happen in a nano-second with an instrument of this volatility.
What happens next? The stock continues up and you simply re-enter the next day. Perhaps at a higher price.

Perhaps that is what was intended. And of course if the stock goes sharply down after your exit or overnight, well great.

But....perhaps you should think about the profit target bit. Is that what you really mean to happen? In a rising market do you want to keep enering and exiting?

No real comment from me. Just a query

It looks like you've developed an evil negative skew system. A negative skew system is one that frequently wins (lots of small wins), but when it loses it loses big. And you're asking for guidance on how to make it "not lose big" when it loses.

Have you ever considered that the two go hand-in-hand? The reason why you're able to collect all of those small wins is because you're willing to bear the risk of eating those huge losses from time to time? And if you were to implement rules that eliminate the huge losses from your results, it might also alter (or even eliminate) all of those small wins in the process?

I hate to say it, but there is no free lunch when it comes to this stuff. I wish I had the "magic bullet" for you, but I don't.

Consider why the strategy should work in the first place. What is the economic justification for it to work? What risk premiums is it capturing? And then consider if trying to eliminate the "big losses" would be violating the underlying basis for the strategy in the first place.