Before I start, let me just accurately define the identity of sexually/gender fluid: a sexual or gender identity that exists beyond a binary system of either gay or straight, man or woman. People with a fluid identity may resist using labels or choosing boxes to define themselves. Also used by people whose sexual or gender identity is not fixed on one point of a continuum.
Fluidity can also be a great identity for those who feel that bisexuality is too narrow for them, but that pansexuality is too broad. A friend of mine explained fluidity in a really great way. For someone who may prefers certain gender, she visualizes it as spilling a bottle of water on the gender identity spectrum. The idea is having most land on the water land on one gender, but also splashing onto others, making the attraction fluid, and not just on one.
Similarly, this can apply to gender identity in that someone may not identity as just female or male, but also sometimes gender-queer, or any of the other gender identities. It represents gender, as well as sexuality as being on a fluid spectrum, and not a permanent identity.