To figure out the chords, you first have to know the “interval relationships” of the notes. Lets look at the notes again.
Holes: 1 2 3 4 5 6 7 8 9 10
Blow notes: C E G C E G C E G C
Draw notes: D G B D F A B D F A
So, for blow holes 1, 2, and 3 you have C, E, and G, which is a C Major chord (major 3rd interval on “bottom”, i.e. C & E, and minor 3rd interval on “top”, i.e. E & G). Notice that holes 4, 5, and 6 are also C, E, G, which is another C Major chord, as are holes 7, 8, and 9. In 1st position the C Major chord is the tonic or root or I chord of the C scale. In 2nd position the C Major chord is the sub-dominant or IV chord of the G scale, which is part of the I, IV, V blues progression.
For draw holes 1, 2, and 3 you get D, G, and B. This is a G Major chord, 2nd inversion (which just means the root note is in the middle–that is, a G Major chord is G, B, D, but if you play the D as the lowest note you get D, G, B–but it is still a G Major chord). Notice that the 4 draw is the same as the 1 draw, a D note. Doubling a note does not change the chord, so drawing holes 1-4 also produces a G Major chord. For 1st position the G Major chord is the dominant or V chord of the C scale. For 2nd position the G Major chord is the root or I chord.
Drawing on holes 2, 3, 4, and 5 have notes G, B, D, F, which is a G7 chord. The dominant 7th note adds color to the major chord and is used very often in blues, rock, and country music. Once again you can double the D by adding the 1 draw and you still have the G7 chord.
Drawing on holes 4, 5, and 6, or 8, 9, and 10 produces the notes D, F, A, which is a D minor chord (notationally Dm).
The four note chords in draw 3-6 and 7-10 are B, D, F, A, which is a Bm7b5 chord. Note that this chord is the same as the D minor chord with the 6th added (called Dm6), but in a different inversion–that is, instead of the 6th note (the B) being the high note in the chord it is the low note.
The diatonic harp can play only those relatively few chords. Many times, players will play “partial chords” or double stops consisting of only 2 notes, since the full chord is not available.
For example, the Em chord, notes E G B, is not on a C harp. But, looking at the figure above you can see that blow holes 2&3, 5&6, and 8&9 have the notes E&G, the first two notes of the Em chord. Similarly, the F chord is F A C, and doesn’t fall on the harp–but the F&A notes are there as draw notes in holes 5&6 and 9&10.
Here’s an important point to remember. The 3rd scale degree (the middle note in root position triads) controls whether the chord sounds Major or Minor, and sets the tonal color. Sometimes the 3rd is left out, which results in a sort of haunting or eerie effect, since the listener does not hear the major or minor sound. However, often times there are other instruments playing, like a guitar, bass, or keyboard, and those instruments set the overall feel of the music, so the harp can get away with not playing all the notes in a chord.
Another technique that can be used to simulate chords that aren’t on the harp is to play them broken apart. Using the above example for Em, the player could play 5 blow & 6 blow to get the E&G, then follow that with the 7 draw to get the B note. Many such combinations are possible.
Finally, broken chords can be played one note at a time, which are called arpeggios.