The price at which an investor buys an investment. The entry point is
usually a component of a predetermined trading strategy for minimizing
investment risk and removing the emotion from trading decisions.
Recognizing a good entry point is the first step in achieving a
successful trade.
For example, an investor researches and identifies an attractive stock,
but feels that it is overpriced. He decides that when the price
decreases to a certain level, he will buy. This is his entry point.
Exercising patience and waiting for the right time to buy will help him
earn better returns on his investments. Determining both an entry point
and exit point in advance are important strategies for investors who
want to maximize their returns.