diff --git a/docs/strategy-callbacks.md b/docs/strategy-callbacks.md
index f265bfe61..7b8769f0c 100644
--- a/docs/strategy-callbacks.md
+++ b/docs/strategy-callbacks.md
@@ -365,7 +365,7 @@ class AwesomeStrategy(IStrategy):
     # ... populate_* methods
 
     def custom_entry_price(self, pair: str, current_time: datetime, proposed_rate: float, 
-                           entry_tag: Optional[str], **kwargs) -> float:
+                           entry_tag: Optional[str], side: str, **kwargs) -> float:
 
         dataframe, last_updated = self.dp.get_analyzed_dataframe(pair=pair,
                                                                 timeframe=self.timeframe)
diff --git a/docs/strategy_migration.md b/docs/strategy_migration.md
index 40c1ee760..5721537c6 100644
--- a/docs/strategy_migration.md
+++ b/docs/strategy_migration.md
@@ -18,6 +18,7 @@ You can use the quick summary as checklist. Please refer to the detailed section
   * New `side` argument to callbacks without trade object
     * [`custom_stake_amount`](#custom-stake-amount)
     * [`confirm_trade_entry`](#confirm_trade_entry)
+    * [`custom_entry_price`](#custom_entry_price)
   * [Changed argument name in `confirm_trade_exit`](#confirm_trade_exit)
 * Dataframe columns:
   * [`buy` -> `enter_long`](#populate_buy_trend)
@@ -227,6 +228,26 @@ class AwesomeStrategy(IStrategy):
     return True
 ```
 
+### `custom_entry_price`
+
+New string argument `side` - which can be either `"long"` or `"short"`.
+
+``` python hl_lines="3"
+class AwesomeStrategy(IStrategy):
+    def custom_entry_price(self, pair: str, current_time: datetime, proposed_rate: float,
+                           entry_tag: Optional[str], **kwargs) -> float:
+      return proposed_rate
+```
+
+After:
+
+``` python hl_lines="3"
+class AwesomeStrategy(IStrategy):
+    def custom_entry_price(self, pair: str, current_time: datetime, proposed_rate: float,
+                           entry_tag: Optional[str], side: str, **kwargs) -> float:
+      return proposed_rate
+```
+
 ### Adjust trade position changes
 
 While adjust-trade-position itself did not change, you should no longer use `trade.nr_of_successful_buys` - and instead use `trade.nr_of_successful_entries`, which will also include short entries.
diff --git a/freqtrade/freqtradebot.py b/freqtrade/freqtradebot.py
index 95a728c99..9e01a150c 100644
--- a/freqtrade/freqtradebot.py
+++ b/freqtrade/freqtradebot.py
@@ -760,7 +760,9 @@ class FreqtradeBot(LoggingMixin):
             custom_entry_price = strategy_safe_wrapper(self.strategy.custom_entry_price,
                                                        default_retval=proposed_enter_rate)(
                 pair=pair, current_time=datetime.now(timezone.utc),
-                proposed_rate=proposed_enter_rate, entry_tag=entry_tag)
+                proposed_rate=proposed_enter_rate, entry_tag=entry_tag,
+                side=trade_side,
+            )
 
             enter_limit_requested = self.get_valid_price(custom_entry_price, proposed_enter_rate)
 
diff --git a/freqtrade/optimize/backtesting.py b/freqtrade/optimize/backtesting.py
index 943426679..aab340c21 100644
--- a/freqtrade/optimize/backtesting.py
+++ b/freqtrade/optimize/backtesting.py
@@ -643,7 +643,9 @@ class Backtesting:
             propose_rate = strategy_safe_wrapper(self.strategy.custom_entry_price,
                                                  default_retval=propose_rate)(
                 pair=pair, current_time=current_time,
-                proposed_rate=propose_rate, entry_tag=entry_tag)  # default value is the open rate
+                proposed_rate=propose_rate, entry_tag=entry_tag,
+                side=direction,
+            )  # default value is the open rate
             # We can't place orders higher than current high (otherwise it'd be a stop limit buy)
             # which freqtrade does not support in live.
             if direction == "short":
diff --git a/freqtrade/strategy/interface.py b/freqtrade/strategy/interface.py
index 30ac4f355..508aa5c73 100644
--- a/freqtrade/strategy/interface.py
+++ b/freqtrade/strategy/interface.py
@@ -339,7 +339,7 @@ class IStrategy(ABC, HyperStrategyMixin):
         return self.stoploss
 
     def custom_entry_price(self, pair: str, current_time: datetime, proposed_rate: float,
-                           entry_tag: Optional[str], **kwargs) -> float:
+                           entry_tag: Optional[str], side: str, **kwargs) -> float:
         """
         Custom entry price logic, returning the new entry price.
 
@@ -351,6 +351,7 @@ class IStrategy(ABC, HyperStrategyMixin):
         :param current_time: datetime object, containing the current datetime
         :param proposed_rate: Rate, calculated based on pricing settings in exit_pricing.
         :param entry_tag: Optional entry_tag (buy_tag) if provided with the buy signal.
+        :param side: 'long' or 'short' - indicating the direction of the proposed trade
         :param **kwargs: Ensure to keep this here so updates to this won't break your strategy.
         :return float: New entry price value if provided
         """