Entry Price
The specific price at which a trader officially opens a position in the market.
Plain-English Meaning
The entry price is your starting line. It is the exact monetary level where your trade goes live. Everything that happens next—profit, loss, risk calculation—is measured directly against this baseline number.
Why It Matters
Knowing your exact entry price is a fundamental requirement for risk management. Without it, you cannot accurately calculate where to place your protective stops or your profit targets.
Simple Example
If you place a market order to buy EUR/USD, the broker fills your order at 1.0850. That 1.0850 is your entry price, and all future calculations reference this level.
This educational example uses selected assumptions for reference calculation purposes. Real conditions may vary by broker, exchange, or instrument.
Beginner Mistake
Assuming a requested entry price will always be the executed entry price during volatile news events. Fast-moving markets can cause "slippage," resulting in a worse entry price than expected.