#1
I'm a complete noob when it comes to Guitars and I have 2 questions I hope you can answer.

I currently have a out of tune Acoustic (getting a Tuner soon though) but in the meantime im practising fingering Frets..the problem is im not sure where the first fret is as theres one a millimeter or so next to Guitar neck and another 2 inches down from it, which would be classed as the first?

Also when im playing Frets do I just strike the string on which I want to play, or do I hold the string on the fret and open play the rest?
#2
The one 2 inches from the head is the first fret.

You just hit the string you're fretting, unless it's a chord.
#3
Yeah if a tab for example says

e|---------|
B|---------|
G|------3-|
D|-5-5---|
A|---------|
E|---------|

Then unless they are vertically aligned, you'd hold down the string on the fifth fret on the D string to play the two 5's and then the third fret on the G string to play the 3. If they're vertically aligned, then you'd put a finger on the indicated frets on the indicated strings and strum on both strings in one motion to play the chord...
e|--------|
B|--------|
G|---5---|
D|---5---|
A|---3---|
E|--------|

Like so
#4
Cool thanks for the help...I can just about manage Smoke on the Water now..cant wait until I get a proper Guitar thats in tune.
Ive just been reading up and such for the past 3 days, still got to get my head around chords though, but i'll manage.
#5
please see the FAQ in here for a few more details of the tab system.
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