The gem is thought to be formed when hot water saturated with colloidal silica and iron oxide invades cavities in country rock and begin to cool. As the solutions began to precipitate and grow layers of silica and iron oxide would be deposited depending on the relative level of those elements in solution and underlying conditions. As iron oxide ran out in the solution colorless chalcedony continued to grow. Cutting Fire Agate essentially reverses nature's process by grinding and polishing away layers, following natural contours, until only the fire is visible. As you might imagine, however, one layer too far and the stone is ruined.
Direct light is ideal.
Observe the depth and location of color layers. Trim away excess chalcedony by sawing, grinding, or sanding. Sawing should be used only for the top portion of chalcedony which has no color. For grinding, use a 100 grit wheel. Grind for not more than four of five seconds.