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Picking from fingers (Index & Thumb): Mainly for notes on the same string
Picking from wrist: Mainly for changing strings, and can be used for notes on same strings
Picking from forearm: Mainly for chord struming.
These are the general rules, but don't be so nervous when you try to apply them.
There can be slight Wrist and/or Forearm movement while you're picking from fingers, Forearm and/or Fingers while picking from wrist, etc.
The main aim is to decrease you're movement & energy as you can, so you can be more comfortable when you're playing with higher speed.
