I have always been interested in the power of data visualization. Readers of my research puzzle pix blog know that I try to come up with unique ways of displaying the movement of investment variables over time, although I really only use one type of chart — line graphs with time shown along the X-axis.
In my consulting work, I find that even large investment organizations struggle to effectively convey information internally or externally in concise and powerful ways.
We react to the visual representation of information immediately, often uncontrollably. That allows for manipulation by the creator, of course, and demands careful evaluation by the viewer.
Take this candle chart.
It is floating there in space, with no indications of the scope of time for it or the degree of movement of the series. It is a simple image of a topic of current interest, which I may end up doing a posting about down the road.
A technical analyst will look at it and come to some immediate conclusions based upon the picture and how it fits with observed patterns in the past. The fundamentalist might deny that it would have any effect on her judgment, but a framing has occurred. As noted some months ago, we are all in the pattern recognition business; at some times we react to ones that we swear wouldn’t affect us.
What do you see?