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An investor has a small amount of $5000 to invest and grow it gradually in the future years by doing trades. His investment can go from $5000 to $6000 to $7000 in 3 to 5 years by buying when the market goes down and selling when the market is up. I can also see that his investment can go down to $5000 or less due to a market crash if he has invested his whole investment money that he has generated.

What are some of the exit strategies that investors use to protect their investment, take small profit and slowly grow the investment?

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Trailing stop orders can protect your investment as long as the retracement is orderly. If the security gaps down then the amount of loss may be more than hope for.

A protective option will provide a hard stop. The drawback is that it has a cost which adds drag to a portfolio. One can reduce/eliminate this cost by collaring long and short positions but that requires that you are willing to give up the upside beyond a certain point. This is effectively trading in the middle, offering a reasonable upside while limiting the downside.

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