For the last eight years the markets have recovered from the housing crisis and then some. As of this writing, anyone who is long the overall markets can say they have a profit. While everyone is fat and happy, this leaves others with the question "So when do you exit"? There will be a point where everyone starts to exit so how do you set your exit point.
Now, were not saying that you would necessarily want to close all your investments but at some point it certainly makes sense to take some off the table in hopes of reloading lower. So how do you decide to do this?
One tried and true method is to use a moving average to decide when to exit. Typically this is suggested to the newer investor as it is a simple process to follow. Most long term investors use the 50 day moving average as a tipping point for taking profits. The idea is that from the current price, down to the 50 day moving average is your wiggle room. This allows the markets to have some wiggle room while the trend continues.
Another method is to use your trading platform and place a trailing stop. This is an automatic order that allows you to lock in profits as prices move higher. As prices move up, so does your profit orders. As prices head lower, your target orders remain in place. Its like a noose tightening ever so slightly along the way.
Lastly, (and there is nothing wrong with this approach) is the profit target. Over time you may notice that your positions generate a profit that makes you happy. At some point the urge to take that profit will become so great that you feel the need to exit. Other times you may have a dollar amount in mind that you would like to lock in. A simple order to close the position will solve that urge.
These are just a few ways to lock in some profits. Of course there could be any number of events that cause you to exit some or all of your positions but this is a good starting point.