Start out with hitting a target about 5 yards away. It is almost impossible to miss at 5 yards. See how the bow feels. Notice the parallax between your line of sight and the arrow somewhere below your chin.

Then move back to 10 yards. Do the same thing.

Then 15.

Then 20.

By now you will notice there is a drop factor, for which you need to compensate.

Some people use the arrow tip as their aiming point.

Others use a spot in the sight window. If you use the sight window then you might as well screw pin sights into it. It means you are naturally an aiming archer.

If you use the arrow tip, then it means your are more of an instinctive archer.

Ultimately everything needs to line up, the string, the pin or arrow tip, the limbs of the bow, your hand at your draw back point, etc.

For a right handed archer, the flex in the arrow will cause the arrow to fly to the right. So you will need to aim slightly left to compensate for "archer's paradox."

http://en.wikipedia.org/wiki/Archer's_paradox

For a left handed archer it will be the opposite.

If you have the wrong arrows for your bow strength then it can get all messed up. Read the wiki article.