Your height above the terrain and in relation to other aircraft is critically important. The altimeter is an amazing instrument that makes it easy to tell what your altitude is.
How to read an altimeter
There are 3 needles on this standard altimeter. The long needles pointing near the 7 moves the fastest and indicates hundreds of feet. The short needles pointing near the 1 indicates thousands and the thin needle pointing near 0 indicates tens of thousands.
The altimeter pictured above is indicating 722 feet. The ten-thousands needle is indicating 0. The thousands needle is indicating that the altitude is between 0 and 1 thousand. The most precise needle, indicating hundreds is showing great than 700 feet. Each of the smaller marks indicates 20 more feet, and because it is slightly above the mark for 720 feet I am estimating the extra 2 feet bringing us to 722 feet indicated altitude.
How does an altimeter work?
The system needs a source of static pressure to operate. This is typically a small hole on the side of the aircraft with a tube leading to the back of the altimeter. As long as the hole is not facing directly into the oncoming air it will provide a good measurement of the air pressure outside.
Note the “Aneroid” in the diagram below. This accordion-like vessel holds air pressure constant inside and expands as the air around it (static pressure from outside) decreases in pressure. As the aneroid expands it pushes an arm that turns the needles of the altimeter. The aneroid is often called a diaphragm.
When descending the air from outside increases in pressure and the aneroid begins to contract back to its original size. This change is reflected on the altimeter.
How to calibrate an altimeter
The Kollsman window displays the altimeter settings in inches of mercury. Simply turn the knob until the correct setting is indicated. In the altimeter picture at the top of this post, 29.93 inches of mercury is set in the window.
It is common for new pilots to get confused by the missing hundredths place in the Kollsman window. The marks along the window indicate units of 0.02 inches of mercury.