All Chords are created equal.

In their most basic form chords are built from the ground up with only three notes. The ROOT, THIRD and FIFTH. Otherwise known as a TRIAD.

There are two important concepts to understand. First, a majority of the chords that are encountered are in Root Position. This means that the Root Note is in the Bass. Second, the Root Note determines the "letter" name of the chord.. In other words the note that is in the Bass or lowest note determines the name of the chord.

Lets use a typical Barre Chord as an example. If we look at an F chord we will see that it appears to contain six different notes. If we reduce the chord down to its basic Triad form we find that the chord actually only contains three different notes.

The Root - F, the Third - A and the Fifth - C.

Using the concept from above we see that the Bass note or Root note is an F so we call the chord an F chord.

If we look at the basic way that triads are constructed we can observe a certain pattern. We begin with one note(the Root) and count up three notes higher and stack one note on top of each other. If we repeat this step a second time we end up with a Triad. Essentially we are stacking one 3rd on top of another 3rd. The end result is our basic triad form of:

Root - Third - Fifth.

Repeating this step of stacking 3rd's on top of each other four more times we end up with extenstions to the basic triad. The 7th, 9th, 11th and 13th. You can see that the numbering system we use is based on the distance between the lowest and highest note of the chord. If we call the chord an 11th chord this means that theoretically the highest note is eleven notes away from the lowest note or Root note.

These are some basic principles for understanding how chords are organized. It is however only a beginning. While it offers a way of understanding chords it does not take into account many other concepts in Chord Theory. It does not for example elaborate on how we define any chord qualities such as Major, Minor, Diminished, and Augmented chords. Further concepts will be discussed more in depth later.