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Published On: Wed, Feb 6th, 2013

Entry Point

An Entry Point refers to the price that a trader makes his very first buy of a stock or security.

The term usually refers to a trading strategy called position building. Position building is when a trader makes measured purchases of a security over a period of days or weeks. Due to the inherent up and down movement of the market, the purchase prices of the same security will be at different levels. The initial purchase price, or Entry Point is used by the trader as a baseline as to the cost of adding to the trader’s position. This is due to the fact that all subsequent trades are measured as higher (sell) or lower (buy) costing than the baseline Entry Point.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.

 

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