Topic: Reading Charts (Read 900 times)

   The best thing to do, in my opinion, would be to start reading into some technical analysis and charting information either in the form of books (which are all over the place such as amazon, or a simple google search), or other threads like GoomBoo's Journal in the Economy>Economics>Speculation area of the forums. Of course, GoomBoo's journal is more along the side of intro traders, but he still explains the use of charting (and how to get charts that look like his do) very well, boiled down to a simplified approach. Besides the fact that he does a nice job of explaining his methods, he has a lot of nice references to great books that can be read covering many different areas.
   Other than that (getting out there and just seeing what turns up on the internet), go ahead and check out some of the charting sites like btccharts.com, or bitcoincharts.com, and the charts area of bitcoinica.com. Btccharts.com is less informative about the information, but exploring bitcoincharts.com was where I began looking into Bitcoin charting. Finally, you may want to look into investopedia.com or another investing site to help improve your investing vocabulary, because after all, bitcoins are just another currency or security that is traded and follows technical analysis to a T (most of the time...) 
   (An exception would be currently with the introduction of manipulators into the market, hence the ask walls)

btccharts uses the same format as mtgoxlive.com. The green line is a standard stock price, rotated clockwise by 90 degrees. Rotate your head 90 degrees to see it.

Imagine the other two lines, asks and sells, as an auction with a whole bunch of bidders and sellers, they are making offers on each side, and they meet in the middle. The height is the total value of bids, the further you get from the center trading point, the more total orders there are on the order books.

This kind of chart is primarily used to get sentiment about how deep the market depth is, how many bids and at what price.

Left side is money, people who are buying. Right side is bitcoins for sale. Middle  (bottom) is where the price is at the moment. 

I'll plug clarks chart here, it's pretty nice and more traditional so easier to understand.
http://bitcoin.clarkmoody.com/

(you can zoom out for a better look at the overall movements, and change the timeframe with the buttons on the bottom, M1, M3 etc.)

The yellow line on the left of the screen represents the people who have offered their dollars for BTC, BIDS.
The blue line on the right of the screen represents the people who have offered thier BTC for dollars, ASKS.
The green line represents the current market price.  Time moves top to bottom so the current price is the green line at the bottom.

I've tried to understand the chart at btccharts.com, but I don't really know what the different lines mean. Can someone explain it to me like I'm 5.