how to hedge overnight position risk

Today's market has big gap up and gap down. Those who have short term or long term swing positions can easily be caught off guard.
So it is crucial to know how to control your risk under this situation. I will take an example to explain the idea. If you have bought 1000 shares of DIA and current price is 71.35 and your stop loss in your mind is 70.99. If the next day gap down open at 68, you will get fill around 68, which is well below your stop loss. What you can do is to use future to hedge your overnight risk taking advantage of the fact of almost 24 hr trading schedule for YM. Write a small program to automatically short 2 contracts of YM (roughly the same as 1000 shares of DIA) if YM retraces 36 points, which is equivalent to 71.35 - 70.99 = 0.36 points of DIA.