7. The CAGED System

Sooner or later you are going to hear about the CAGED system.  I will explain so that you know what it is, but, like everything, it's something to study when it is relevant.
The system is used as a method of visualising the chords, scales, intervals and arpeggios all over the fretboard, in relation to their basic chord shapes in the open position: C, A, G, E and D (CAGED). 

If we take the open E chord and move the shape up one fret, it beomes F.  Most people understand this fairly soon, even if it takes a little while to be able to play the chord cleanly.  This is the essence of the CAGED system and, in this example we refer to the 'E shape'.  Similarly, by moving an open A chord up two frets, we get B.  In both of these examples, the nut is replaced by using the first finger as a barre, and this one is the 'A shape'.  You will start to see that these basic chords can be played in different positions, using a barre.  Some, like the G shape, aren't frequently used to play the whole chord, it's all about seeing the shape. 

We apply the system to all versions of the chord, so your open Am, for example, moved up two frets becomes Bm, it is still, however, the 'A shape', but you see the notes over Am.

The first scale taught is usually G major beginning on the 6th string third fret.  If you move the same pattern to begin on the eighth fret, you'll be playing the C major scale.  If you play both using the same 'E shape', the idea is that you visualise the E chord as your fingers play the notes on and around it.

If you didn't know what the CAGED system was, that is all you need to know about it.  For now...  :  )
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