Fibonacci Cluster Forex Charting Software
What Is A Cluster?
A Fibonacci cluster is when several fib lines are drawn from various highs and lows on a chart and several of the lines touch or are very close.
That's a mouthful. I'll show you several chart examples in a bit which will make it clear if you're not sure what I'm saying.
Software is made that can automate this process. If you're willing to spend $97 to $577, it can be yours. It's sold by FearGreed.com (opens a new window).
Why Software Isn't the Best Choice
Why might software not be the best choice for finding the clusters? First is the price. Second is why pay and have the computer do something you can do yourself? Especially since you'll gain a better feel for the forex market by doing it by hand.
It's not that hard really.
Look at this chart.
The black circles are the where the clusters are. The first one was blown through. The second one held. (Sorry that the colors are weird. I had to make them easily visible.) All I did was draw in fib lines for one thrust and then the thrust and extension, which became a larger thrust.
The support that held is a combo of the 61.8% and the 76.4% lines.
I truly think that if you're interested in trading clusters, before you spend the money, you should try mapping them out by hand. Obviously, if you really want to trade them, you'll want to get the software eventually. But at first, it's a good idea to just draw them in.
The easiest way to do it is to never erase your Fibonacci lines. Just keep drawing new ones over time. That way you will in a rather organic way see the clusters develop.
In this example you have the cluster at 38.2% and 76.4%. There the price gets stuck in a sideways motion before shooting up.