This has nothing to do with the main subject matter of the article but those graphs are almost unintelligible. I didn't even try to decode what they were trying to communicate.
The graphs are brilliantly clear to me, but I have a background in electronic derivatives trading and so am used to staring at wiggling psychedelic surfaces for hours on end. Nanex's audience is algorithmic securities traders. Imagine trying to explain a circuit diagramme to a room of uninitiated economists ("is there a reason the wire goes all squiggly right there?").
A little help on how to read the 2nd graph or maybe some source material to teach me. I'm not exactly sure how to even begun to research what kind of map it is, it looks like the matrix had an unfortunate mishap.
What you are looking at is a graph of the liquidity in the order book over time. A security does not have 1 price it has 2, the bid and the ask. The difference is called the spread. The bottom is showing the amount of liquidity at each price level. I don't know of a good source on how to read these charts since most people build their own viz tools.
Awesome, this explaination and electronic derivatives trading lead me on the right path of reading candlestick graphs. I discovered stockcharts.com from doing some basic research and now have a pretty good understanding of them. I won't be trading any time soon but I can at least read it to some extent. Thanks a bunch. Sorry if I got a bit off topic, but I hate not knowing stuff.
