Guitar chords & scale

Chord theory consists of how chords are built. Chords are built from scales. Scale degrees, or intervals, are combined to make major and minor chords (see Fretboard Theory Chapter 6 Building Chords). The notes of these chords are scattered throughout a pattern that covers the whole fretboard. Break this pattern up into five pieces and something familiar emerges.
One position resembles an open C chord shape, the next an open A chord shape, followed by G, E and D. This is the so-called “CAGED” system which teaches you how to play different shapes and voicings on the guitar (see Fretboard Theory Chapter 3 CAGED Template Chord System and CAGED Template Chord System DVD). Additional theory will teach you how chords become more complex and interesting sounding when more scale tones are added like fourths, sixths, sevens and ninths (see Fretboard Theory Chapter 10 Chord Extensions).
Scale Theory

Scale theory consists of how scales are played and how they’re applied to chords and progressions. The major scale is used to play melodies, riffs, leads, and bass lines (see Fretboard Theory Chapter 5 Major Scale). When applying this scale, it’s critical to combine it with chords and progressions that are derived from the same scale. Otherwise you’ll sound out of key (see Fretboard Theory Chapter 7 Applying Scales). Depending on the progression, the major scale can sound happy, sad, jazzy, exotic or strange (see Fretboard Theory Chapter 8 Modes). The pentatonic scale, which is really just a simplified major scale, is easier to use and apply. Rather than take the whole progression into consideration, as is necessary when applying the complete major scale, the pentatonic needs only correspond to the root chord (see Fretboard Theory Chapter 2 Pentatonic Scale and Getting Started with the Pentatonic Scale DVD).
Chord Progressions

Chord progressions are based on the major scale. Scale degrees, or intervals, are combined to make major and minor chords. When chords are built for each scale degree the following sequence emerges: