First up, Yahoo! The company reported dismal earnings and lowered guidance for the coming quarter this week. This resulted in yet another 52week low being set this week (under $23), meaning a few dollars more for the monkey's coffers. I sold half of my position at $24, just before the earnings announcement. Do I wish I had not done so, given that the stock has dropped further since? No way. I like to sleep easy at night and taking a few quid off the table just prior to a big announcement helps me do that.

Is there a lesson to be learned from Yahoo's continued woes? You bet . . .

trade with the trend and let your winners run.

Regarding the former, take a look at a 2006 chart for Yahoo! . . . it's damn ugly.

When I got short a month ago, I did so in the knowledge that the short-, mediumand long-term trends were all down. Nothing has changed in the meantime and so I've had no reason not to let my profits run.

The impulse to grab your profits is a powerful one but has to be resisted when all the evidence is pointing to trend continuation. A month is quite a long time for the monkey to hold onto a position but the decision to do so was an easy one . . .

this has been a remarkably stress-free position from the outset.

Onto a less disciplined trade. I went long on IBM at $87.50 on Tuesday, just hours before earnings were due to be announced. Barry Ritholtz, a hedge fund trader that keeps a wellwritten blog, pointed out that the company was looking good for a number of reasons (large pipeline of patented products coming through, a trailing p/e ratio of just 16 compared to 23 for the Dow and the fact that the company had beaten earnings for the past five quarters).

Make that six quarters.

The results were good, IBM opened the next morning at $91 and I was up almost 400. So why am I not happy with myself?

Several reasons. Firstly, it's a rule of mine (unless under exceptional circumstances) not to take new positions in stocks that are about to report earnings. I used to do so in my early trading years, which resulted in me making a few killings but being pulverised on other occasions. The stomachchurning emotions this engenders, the 3am sweats, that dreadful mixture of adrenaline and terror as you turn on your computer . . . euch.

Secondly, you can't rely on a stop to protect you in the event of bad news. My stop was around $85 but the stock might easily have opened at a much lower point (in my defence, IBM is not a volatile stock, but you never know with earnings).

Thirdly, the only good reason for entering the trade was the company's recent history of beating results. The other factors may be relevant to investors but they are of no consequence for a trader looking for a quick buck. I knew this but nevertheless used them to justify taking a position.

A good trade can lose you money just as a bad one can make you money. Make no mistake . . . this was a bad trade. Temptation got the better of me; I got away with it.

However, now that I'm in the trade and in profit, there's no reason not to give this one a chance. The stock is trading at a 52-week high, earnings are out of the way and my stop has been moved up to break-even . . .

not a bad situation to be in.

Currently, I've a pretty large short position (a bet of 10 per point) in Elan at $15.90. My stop is at $16.30.

If the stock goes to $15.30 . . .

by the time you read this, it may already have done so . . .

I'll close the position and go long.

Elan has been seesawing back and forth between $15.20 and $16.20 for the last month.

I love these predictable range trades. I plan on buying low and selling high for as long as the range persists. Eventually, it will break out to the upside or the downside and I'll lose money but hopefully, I'll have made a lot more before that happens.

One final word: many readers will doubtless have been watching Tuesday night's showing of Raging Bulls, the RTE documentary that looked at the rise and fall of Fran Rooney's Baltimore Technologies. A wave of nostalgia overcame me as I reminisced on the days when cluelessness was no barrier to making stacks of money. Back then, the worst traders were making the most money.

I recently read an interview with a kid who turned his Bar Mitzvah money . . . $12,000 . . . into $1.65m during those heady days. His recounting of his 'best' trade, where he put all his money into a stock about to be profiled on CNBC (but which had already risen 70% the previous week), made me smile . . . it was moronic, which is why it worked (the stock nearly doubled, making him $120,000 in a day).

I've just reread that last sentence. I think I'll give myself a break on the IBM trade. Who says trading has to make sense?