Entry

In financial trading, an entry is simply the point at which a trader enters the market by either buying or selling a certain asset.

Entries have two attributes, i.e. the price at which the trader entered, and the time at which the trader entered.

There are a number of different types of entry in trading. The most common one is the Market Order.

A market order is a manual order, which allows the trader to enter the market virtually immediately upon demand, at the current market price.

A trader typically executes this by clicking on a buy or sell button on their broker’s platform, which displays the bid or ask price.

The other two types of entries are pending orders, known as a stop entry order, where the trader buys above or sells below the current price, and a limit entry order, where the trader buys below or sells above the current price.

Understanding Entries

With regards to a stop entry order, there are two types, known as a buy stop entry order, and a sell stop entry order.

A buy stop order is a pending order that is pre-set by the trader on a broker platform, which is a command to automatically buy an asset at a specific price above the current market price, should the price of that asset reach that point.

A sell stop order is a command to automatically sell an asset at a specific price below the current market price, should the price of that asset reach that point.

Concerning a limit entry order, again there are two types. First, a buy limit order is a pending order pre-set by the trader on a broker platform.

This command automatically buys an asset at a specific price lower than the current market price, should the price of that asset reach that point.

A sell limit order is a command to automatically sell an asset at a specific price higher than the current market price, should the price of that asset reach that point.

With all pending entry orders, if price does not happen to reach the specified price, the orders are not executed.

Some traders also apply a time limit for pending entry orders, so that if the price doesn’t reach a specified price within a certain time period, the order is cancelled after that time period expires.

Pending entry orders are useful since a trader cannot be at one’s trading terminal at all times, so they are executed automatically in the trader’s absence.

However, the disadvantage is that because the trader isn’t monitoring the market, there could be a nasty surprise upon arrival.

TBC