When you use a capo you raise the pitch. Every fret is a half step up, so the chord raises by a semitone.
When reading from left to right, every next note is just one fret higher. An easy way is to start on a note that corresponds with the open string name.
→ 1 fret/semitone up
← 1 fret/semitone down
C C# D D# E F F# G G# A A# B C | In sharps
C Db D Eb E F Gb G Ab A Bb B C | In flats
For instance the low E string: you start on the E (open string), after the E, the first fret, lies the F. So the first fret on the low E string is called an F. After the F you find a F#, which is the 2nd fret, 3rd fret is the G, then the G# and so on.
Here are four ways of playing the exact same chord progression:
Example 1: "Stir It Up"Open: A - D - E
Capo 2: G - C - D
Capo 5: E - A - B
Capo 7: D - G - A
We start on a A chord.
If we want to play the same chord on a different position using the capo, we need to lower the chord by the same amount the capo makes the guitar sound higher. The guitar becomes higher pitched, therefore we need to play a lower pitched chord to compensate for the capo. If you want to hear the A chord, and you put the capo on fret 2, we need to lower the A chord, two semi-tones. That means two half steps down in our note order, that would make a C!
So we now played the same chord progression in four different ways.
Do you think that they are all different chords? Nope, different chord shapes, but when you close your eyes they all sounded like A D E. The biggest difference is the sound of the various shapes and the different in sound of the chords played higher up the neck.
Of course, when you just play by yourself you can just call it D G A (Capo 7), but if you play with other musicians you should always refer to them by their real name or else things could end up in a cacophony.
Example 2: "Save tonight"Open: Am - F - C - G
Capo 3: F#m - D - A - E
Capo 5: Em - C - G - D
Capo 7: Dm - Bb - F - C
Example 3: "Wonderwall"Capo 2: Em7 - G - Dsus4 - A7sus4
Capo 4: Dm7 - F - Csus4 - G7sus4
Capo 7: Bm7 - D - Asus4 - E7sus4
Open: F#m7- A - Esus4 - B7sus4
As you can see, the options you've got with a capo are close to limitless. And who doesn't choose an open chords above a barre chord?
Try to experiment a lot with a capo and before you know it the capo is an essential piece of your gigging gear!