Entry Point Definition – What is Entry Point? | CFI

entry point

Entry point refers to the price at which a trader [sold] or [bought] a financial [instrument] and therefore entered a trade.

 

For a trader to profit, they must enter and exit their positions at the most profitable price points. Traders will commonly undertake [fundamental analysis] to determine if they view an asset as undervalued or overvalued in the marketplace. They will then, tend to use [technical analysis] to determine the most likely pricing directions, given the asset’s current value and market conditions, based on historical data.

 

Once they have concluded on the direction that they believe the price will go, the trader can then set entry and exit points. For example, if they conclude that gold, at $1,685.60 is undervalued by the market, and their technical analysis leads them to believe that should the price rise toward $1,690.00, it will gain momentum and continue upward towards $1,700.00 and perhaps beyond. The trader may set $1,690.00 as their entry point.

 

For a trader to accurately predict when the market’s turning points are at play, they must possess a strong understanding of the influence of supply and demand within that market, along with strong technical analysis skills.

 

While the above example is a common approach, there are multiple strategies that a trader may employ, as it is highly unlikely that the accurate entry point can be determined with the use of a single strategy.

 

 

Key takeaways

 

  • The entry point refers to the price at which a trader buys or sells an instrument on the market
  • The point of entry is determined by assessing an instrument’s value and predicted future price action
  • There are a range of technical analysis techniques that can be applied to aid in identifying the most suitable entry point
Credit Financier Invest (Mauritius) Ltd is an award winning global financial markets provider with over 23 years of experience and regulated entities in several jurisdictions, focused on offering impeccable execution and trading conditions including very low spreads, professional services, dedicated support and powerful tools.
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Important Disclaimer:


We would like to remind that while we endeavour to provide best possible services, CFI provides execution only services and any information, reports, opinions, commentary or other materials he receives from CFI directly or from its employees or through any analytical tools provided to him or third party research provided to him from the Company shall not be deemed as investment advice and it cannot be relied upon to make investment decisions. The Client commits to make his own research and from external sources as well to make any investment. The Client accepts that CFI will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The contents of any report provided should not be construed as an express or implied promise, as a guarantee or implication that clients will profit from the strategies herein, or as a guarantee that losses in connection therewith can, or will be limited.


Forex and CFDs are leveraged products that incur a high level of risk and a small adverse market movement may expose the client to lose the entire invested capital. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. The possibility exists that you could sustain a loss in excess of your deposited funds even if a stop loss is used and therefore, you should not speculate with capital that you cannot afford to lose and be aware of trading risks. Credit Financier Invest (Mauritius) Ltd provides general information that does not take into account your objectives, financial situation or needs. The content of this website must not be interpreted as personal advice. Please ensure that you understand the risks involved and seek independent advice if necessary.

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