Using The Entry Price Indicator

There is a custom indicator called "Special / Miscellaneous". And in that custom indicator family is an indicator called "Entry Price".

I guess normally you would use this indicator in conjunction with the add or multiply options - like:

• Entry price - 0.0050, which is 50 pips below the entry price for a currency like EUR/USD. Might be a good spot for a long stop loss; or
• Entry price * 1.025, which is the entry price plus 2.5%. Might be a good spot for a long take profit.

You need to know that this is more accurately referred to as the calculated entry price, if you use this indicator for the initial stop loss or initial take profit values.
 

For market orders

When placing market orders (which is what happens when you set the entry values to "enter at market"), there is no way to tell what the actual entry price is going to be. That's not ATM's fault, that's just the nature of market orders.

But ATM has to put a stop loss along with any orders it places, including market orders. So when you use this indicator for the initial stop loss or initial take profit, ATM has to make an assumption about the probable entry price.

ATM assumes that the entry price is going to be the same as the Open price of the most recent bar. (That is, there is the most recently completed bar that ATM uses to make its calculations, and then after that is the bar that is still in progress. ATM uses the Open of that in-progress bar as the probable entry price).

So let's say that the in-progress bar opened at 1.2500. And let's say you set the initial stop loss to be 100 pips below the entry price. Then, the initial stop loss will be set to 1.2400. Easy.

But, what if the actual entry price was 1.2501? Well, remember that the initial stop loss was set at the time of placing the market order, back when we had no idea what the actual entry price would be. Therefore, the initial stop loss is still going to be 1.2400, which is 101 pips below the actual entry.

Therefore, even though you specified that you want the stop loss to be a certain number of pips below the entry, it could in fact end up more (or less) than that when using "enter at market".
 

For limit orders

While there is far more likelihood that the calculated and actual entry prices will be the same, sometimes there is slippage. Slippage means that the broker couldn't get that exact price you wanted but rather your trade was opened a pip or two away from your preferred entry price. Therefore everything that was said for market orders applies almost equally to limit orders.
 

After Entry

This problem lies only with the initial stop loss and initial take profit values. After the trade is opened, of course we now know the exact entry price. So any other setting using the "entry price" indicator will be calculating using the correct value.