Fibonacci Clusters Trading Tips: How to Improve Your Odds

First of all, we need to explain what the Fibonacci cluster is. To make a long story short, Fibonacci clusters are a simple and productive way to apply for Fibonacci extensions in trading. The biggest advantage of the above-mentioned method is that you don’t need to know which of the Fibonacci levels the price should bounce from – clusters speak for themselves. 

Fibonacci clusters have the potential to make your life easier. For example, they can show the whole zones of resistance and support. 

Forex market 

As you can see, Fibonacci clusters play an important role in trading. Now, we can focus on the forex market. 

First of all, currencies play an important role as currencies allow us to purchase goods and services. There are many currencies in the world. However, people usually hear only about the most-popular currencies, such as the U.S. dollar, euro, British pound, etc.

For example, if you live in Italy and would like to buy coffee from Brazil, then either you or the company from which you buy the coffee has to pay the Brazilian company for the coffee in Brazilian reals. 

Let’s take a look at another example. An Australian tourist in France can’t pay in Australian dollars to visit the Eiffel Tower as the Australian dollar isn’t the currency of France. So, the above-mentioned tourist has to exchange Australian dollars for euros at the current exchange rate. 

The forex market is quite interesting, to say the least. For example, there is no central marketplace for the world’s largest financial market. Is it worth mentioning that currency trading is conducted electronically over the counter? Interestingly, all transactions occur via computer networks among traders around the globe. 

We also need to mention that currencies are traded around the world in the major financial centers of London, New York, Frankfurt, and other major financial centers across almost every time zone. 

Commercial, as well as investment banks, conduct the vast majority of the trading in forex markets on behalf of their clients. However, professional and individual investors also participate in the forex market. 

Advantages of Fibonacci clusters 

Let’s get back to Fibonacci clusters. 

The list of advantages is quite impressive. For example, clusters help traders to manage trades from one important level to the next. 

Furthermore, day traders have the opportunity to profit from the short-term momentum that quite often derives from Fibonacci clusters. 

Importantly, they (Fibonacci clusters) are, to a certain degree, psychological price levels because clusters also divide the chart into two zones (bullish above and bearish below).

To sum up, a technical trader must know where the Fibonacci clusters are and be prepared to profit from them.