Finger picking is a playing technique where the fingers are used to pluck the strings instead of a guitar pick. This lesson will cover some tips for finger picking.
When reading music that uses finger picking, you may see the term "PIMA" or the initials P, I, M or A used. PIMA is an acrostic for the thumb and the first three fingers of the right hand. This is often used to indicate which fingers to use in picking.
These letters are abbreviations of Spanish words, which are:
Pulgar = Thumb
Indice = Fore Finger
Medio = Middle Finger
Anular = Ring Finger

Use your left hand to form the E chord on the guitar neck.
Pick the notes, using your right hand; with the fingers indicated. Pick upwards using the fingertip (Pick downward when using the thumb). You can use the fleshy part of your fingertip or your fingernail, whichever works best for you.
------P---A---M--I--P----A---M-I----P
E ||------0--------------0-----------------||
B ||----------0--------------0-------------||
G ||-------------1--------------1----------||
D ||--2--------------2---------------2-----||
A ||-----------------------------------------||
E ||-----------------------------------------||
Here, we use the same chord, but will use our fingers to pick downwards. Remember to watch the fingering. Start out slowly until your fingers are 'rolling', then pick up speed.
------P---I--M---A--P-I--M--A
E ||----------------0-------------0--------||
B ||-----------0-------------0-------------||
G ||-------1-------------1-----------------||
D ||--2--------------2---------------------||
A ||-----------------------------------------||
E ||-----------------------------------------||
Once you have the technique down, try this exercise. We will use the same fingering as we did in the very first exercise above. Play each staff four times, then move to the next one. Continue to practice it until you are able to play the whole thing in a nice, fluid sounding roll.
E ||------3------------------------3-------||
B ||----------0---------------0------------||
G ||-------------0-------0-----------------||
D ||--0--------------0---------------------||
A ||-----------------------------------------||
E ||-----------------------------------------||
E ||------0------------------------0-------||
B ||----------0---------------0------------||
G ||-------------0-------0-----------------||
D ||--2--------------2---------------------||
A ||-----------------------------------------||
E ||-----------------------------------------||
E ||------0------------------------0-------||
B ||----------1---------------1------------||
G ||-------------0-------0-----------------||
D ||--2--------------2---------------------||
A ||-----------------------------------------||
E ||-----------------------------------------||
E ||------2------------------------2-------||
B ||----------1---------------1------------||
G ||-------------2-------2-----------------||
D ||--0--------------0---------------------||
A ||-----------------------------------------||
E ||-----------------------------------------||
If you are able to play these exercises well, you are on your way to great finger picking.