Select Set Password in the Collection menu to protect the active collection with a password, or to change the password. If you do not enter a password, any previous password will be removed.
The Set Password command does not have any obvious immediate effect. If you close the collection and open it again, you will see the difference. When you open a password-protected collection, its tab will be red, and the collection will appear to be empty. The AceText Editor will display a box where you can enter the password to unlock the collection. Unlocking a collection does not remove the password. If you close and re-open the collection, you'll be prompted for the password again.
If you've unlocked a collection by typing in its password, you can use the Lock Collection command to lock the collection again. In the Files Preferences you can enable various options to automatically lock collections in certain situations. Use these options to make sure you don't accidentally leave sensitive collections unlocked.
Be careful when password-protecting collections. AceText encrypts collections with the "blowfish" algorithm, designed by world-famous cryptographer Bruce Schneier. This encryption cannot be broken except by guessing the password. If you forget your password, the clips in the collection will be irretrievably lost.
You can put a password on the ClipHistory if you want to. If you do so, the ClipHistory will be non-functional each time you start AceText, until you unlock the ClipHistory by entering its password.
The Recycle Bin cannot be protected. Clips deleted from password-protected collections will be saved in the Recycle Bin. You will probably want to turn on the option to purge the Recycle Bin when closing AceText in the Files Preferences.
There is no toolbar button for the Set Password command. If you've hidden the main menu, you can access the command by right-clicking on a collection's tab.