Yesterday I wrote about some possible reasons why the stock you bought with great hopes and anticipation for wild appreciation did not in fact appreciate. One of the reasons I offered was that the stock had been bought "into strength", meaning the purchase had been made during a time of price appreciation in that particular stock.

In the article Why did my stock go down?, I wrote:

If so you bought into strength. This isn't necessarily a bad thing; but it does mean you need a lesson in investing discipline. Consider this experience just such a lesson. Learn from your mistake.

One of the key ideas embedded in that paragraph is that of investing discipline.

Discipline is all about having a plan and sticking with it. It's understanding that investing should be a cold and emotionless process. In reality many of us find it nearly impossible to be disciplined investors, to invest without emotion.

• Some of us are just too afraid of losing money. We're risk adverse.
• Some of us aren't all that afraid of losing money; but we also may be too quick to follow our emotions and invest before doing our homework.
• And have any of us ever watched as a former high flier came back down to earth? How many of us had become so emotionally attached to our darling stock that we actually ended up losing money on it?

For many of us separating investment from emotion is next to impossible. But that doesn't mean it can't become possible in the future.

I have a technique I've used to help me stay disciplined in my investing life. It's helped me to separate emotion from money. I'll offer it to you freely, with no cost or obligation. All you have to do is try it out for yourself and see.

Now, before I go any further, I also want you to know this lesson I'm offering for free will still cost you money. You won't be paying me a dime for it; but like any good learning experience it will have a price.

The technique I recommend to anyone who has trouble separating money from emotion is simply to make a series of investments over a period of a few days or weeks without giving any regard to whether you're gaining or losing money in the process.

Ideally you'll use a couple of hundred dollars for this.

1. Pick a day and time for your first transaction. At that appointed time use your stake to place a "Good 'til Canceled" limit order for any security you might be interested in. Set the price at a small discount from the existing bid price. You don't need to do research for this exercise. Just target a company you're familiar with and like. You're only buying a few shares with your hundred dollars. Whether you double your money or lose it all it won't make a great deal of difference in the grand scheme of your life.
2. At the time of purchase - This was a limit order. so that was the date and time at which the order is executed - set a date and time at which you will place a "Good 'til Canceled" limit order to sell your stock.
3. When that time comes simply enter a limit order to sell your few shares of stock at a small premium to the offered price.

Once you've done this turn once or twice you will have experienced just how emotionless disciplined investment transactions should be. You should seek to have that experience every time you buy or sell.

This investment discipline learning trick may seem absurd to you. It will cost you money. You may lose money on the change in stock price round trip. And even if the stock appreciates it likely won't appreciate enough to offset the commissions you'll pay. The important thing to remember is this isn't a game. It's an exercise. It gives you experience in a low-risk setting.

Do it and you'll feel what it's like to separate your emotions from your money decisions. That's investment discipline at its finest.