Made a few quid, lost a few quid. Canadian trader Brian Hunter, of which more anon, had a more dramatic time - he lost $5bn.

It's hard to follow a sentence like that with a straight-faced analysis of bets as small as mine, but I'm going to try anyway.

This week was Fed week, with US bankers electing to leave interest rates unchanged - no surprise there. The fact that this news was already reflected in prices, coupled with overbought markets facing resistance at 52-week highs, made me wary that we'd see some money being taken off the table. Instead the market, buoyed by great earnings from software giant Oracle as well as an oil price that continues to plummet, is looking resilient and well-poised to take out those highs (as one headline economically read, "Oracle + Oil + Fed = Rally").

Unfortunately for me, I was stopped out of my existing Nasdaq position on Tuesday.

Lousy guidance from Yahoo saw the Nas dive, hitting my stop before reversing back upwards - sickening. I'd have been 500 or so richer by Wednesday morning if my stop hadn't been hit. Should I have done things differently? No. You have to use stops (as we'll see later). Mine was located in a good position (underneath the low from three days previous). Sure, I could have made more money, but what if the market kept going south? I'd have given up all my gains.

As it happened, I got shaken out - c'est la vie. Anyway, every cloud has a silver lining.

As soon as the Yahoo news broke, this monkey was looking for a spot to get short.

In the space of five minutes, the stock dropped from $29 to $26 before climbing up to $27, at which point I put in an order to short if price dropped below $26.50. It did, and continued down to the $25 area within minutes. 300 in ten minutes - sweet.

Holding on to this one. The trend has been down with Yahoo for some time now.

I'll cover only if I think that's changing. Still holding on to last week's position in Apple. Surpassed $75 on Wednesday and there's no reason not to let it run.

Not so with Elan. Closed out this week at a small profit as it appeared to be going nowhere. Made a number of mediocre trades that don't merit mention.

Anyway, enough about me. Everyone on Wall Street was talking about Amaranth, the US hedge fund that lost $5bn in one week due to the reckless bets in the natural gas futures market by 'hotshot' trader Brian Hunter.

This was a disaster waiting to happen. In 2003, Deutsche Bank, Hunter's previous employer, took a $51 million loss in one week due to a bet that went awry. Hunter blamed those losses on "an unprecedented and unforeseeable run up in gas prices". So it was all the fault of that pesky market?

Brian, that's why they invented stop losses.

By April of this year, Hunter had made $2 billion for his hedge fund. He lost $1 billion in May, made it back in the summer before plummeting prices slashed the fund's assets by an incredible 50% in the last week.

Hilariously, he told reporters in July that "every time you think you know what these markets can do, something else happens".

Brian, that begs the question - why did you not take smaller positions?

Bizarrely, management saw things differently. "What Brian is really, really good at is taking controlled and measured risk, " according to Amaranth founder Nick Maounis. That was in Augustf Let's be frank here. That kind of trading is lunatic stuff. Most professional traders will risk no more than 2% of one's capital on a trade.

Some will be more aggressive and risk 45%. Using no stops, risking 50% on one trade - that's wacko. It makes one question how many ostensibly sophisticated hedge funds actually understand the basic tenets of position sizing and money management.

Unfortunately, most amateurs trade this way. They make silly bets, double or triple their money and think they're George Soros, not realising that even the best guys have losing streaks. If you're risking, say, 20% of your capital in each trade, all it takes is five consecutive losses before you're wiped out.

The 2% rule is not as constraining as one might think. With a 25,000 bankroll, I can afford to risk 500 per trade (if I want to - most of the time, I'll risk less). So, for example, if I buy AIB at 20 and place my stop loss at 19, I can afford to buy the equivalent of 500 shares, or 10,000 worth.

If my stop is at 19.50, I can buy 1000 shares. You get the picture.

What if it's a sure thing? Believe me, it's not. That's moronic talk. Sure things don't exist in the markets. You trade based on probabilities, not certainties. Leave the macho stuff to the Brian Hunters of the world.

Weekly gain/loss; + 200 Overall balance; 27,000 Market Monkey is a recreational trader taking 25,000 and trying to expand it to a 100,000 bankroll so that he can give up the day job and trade full time. Send your thoughts or questions to marketmonkey@ tribune. ie and be sure to include 'Monkey' in the subject line