Drawing graphs

TikZ — Graph specifications

TikZ provides syntax similar to DOT which you can use to tighten up your graph drawing code considerably.

\documentclass{standalone}

\usepackage{tikz}
\usetikzlibrary{graphs,quotes,arrows.meta}

\begin{document}
  \begin{tikzpicture}
    \graph[nodes={draw,circle},edges={-{Stealth[]}}] {
      A -> ["1"] B,
      A -> C,
      C -> B
    };
  \end{tikzpicture}
\end{document}

As you can see, you trade fine-grained control for easier syntax. The graphs library really shines when you specify more complicated graphs:

\documentclass{standalone}

\usepackage{tikz}
\usetikzlibrary{graphs,graphs.standard}

\begin{document}
  \begin{tikzpicture}
    \graph {
      A -> { subgraph I_n [V= {B,C,D}] } -> E
    };
  \end{tikzpicture}
\end{document}

There are many more options and pre-defined graphs; see section 19 of the TikZ manual.

TikZ — Algorithmic graph drawing

TikZ implements several algorithms for automatic graph layouts (requires LuaLaTeX).

\documentclass{article}

\usepackage{tikz}
\usetikzlibrary{graphs,graphdrawing,quotes}
\usegdlibrary{force}

\begin{document}
  \begin{tikzpicture}
    \graph[spring layout] {
      A -> ["1"] B,
      A -> {C, D},
      C -> {B, D},
    };
  \end{tikzpicture}
\end{document}

There are several algorithms and many options to influence them. See part IV of the TikZ manual for details.

TikZ — Manual layout

Package TikZ lends itself very well to drawing graphs.

This is a small example (requires TikZ 3.0+):

\documentclass{standalone}

\usepackage{tikz}
\usetikzlibrary{positioning,arrows.meta}

\begin{document}
  \begin{tikzpicture}[auto,vertex/.style={draw,circle}]
    \node[vertex] (a) {A};
    \node[vertex,right=1cm of a] (b) {B};
    \node[vertex,below right=1cm and 0.5cm of a] (c) {C};

    \path[-{Stealth[]}]
      (a) edge node {1} (b)
      (a) edge (c)
      (c) edge (b);
  \end{tikzpicture}
\end{document}

You can create arbitrarily complex graphs; beware lengthy code, though. Recall that there is \foreach and take note of all the positioning and styling options (cf. TikZ manual, section 13 to 17).

State Transition Diagram of a Markov Chain

Suppose the following matrix is the transition probability matrix associated with a Markov chain.

   0.5   0.2  0.3
P=  0.0   0.1  0.9
    0.0   0.0  1.0

In order to study the nature of the states of a Markov chain, a state transition diagram of the Markov chain is drawn.

\documentclass[12pt,a4paper]{article}
\usepackage{tikz}
\usetikzlibrary{shapes,arrows,positioning}
\begin{tikzpicture}[->,>=stealth',shorten >=2pt, line width=3pt,
                                  node distance=2cm, style ={minimum size=20mm}]
\tikzstyle{every node}=[font=\huge]
\node [circle, draw] (a) {1};
\path  (a) edge [loop above] (a);
\node [circle, draw] (b) [right=of a] {2};
\path  (b) edge [loop above] (b);
\draw[->] (a) -- (b);
\node [circle, draw] (c) [below=of a] {3};
\path  (c) edge [loop below] (c);
\draw[->] (a) -- (c);
\draw[->] (b) -- (c);
\end{tikzpicture}