You can take the emotion out of investing by use of “limit orders” to automatically sell securities when certain prices are reached.
You can set target prices for some or all of the stocks you own and place limit orders at those levels. If the stocks go up to those prices, the shares will be sold and the proceeds can be reinvested elsewhere, locking in your profits.
Another tactic is to enter “stop-loss” orders with your broker. If you buy a stock for $80 you might place a stop-loss order at $70, limiting your downside on the stock to $10 per share, which would be 12.5 percent.
Suppose your $80 stock goes up to $100. You might raise your stop-loss from $70 to $90, locking in a gain from your original $80 purchase price. If the stock keeps moving up, you can keep increasing the selling price of your stop-loss order.
