Product / Product Information / Special Techniques
Using Fibonacci Clusters you can determine the probability
of a trend reversal for each price level. Fibonacci
Clusters indicate the price level on which a potential change
in the trend may occur. The stronger the cluster, the greater
the likelihood that the price level is a support or resistance
level for the current trend.
Fibonacci Clusters were not designed to be used alone. They
should be used as a confirming technical analysis indicator or to determine
where a change in a trend may potentially happen.
Fibonacci Clusters are calculated using the following procedure:
the price range of a security is divided into a specified number
of sub-ranges (clusters). After that, Tradecision uses all pivots
(minor, intermediate and major) to form all possible Fibonacci
Levels (Retracements and Extensions). The more Fibonacci Levels
are assigned to a cluster, the stronger the cluster is.