I presume that you have a new blog or a blog that you are really working hard and using some campaigns in Increasing your blog traffic, but how do you know that its working well? For this purpose you need a tool to check your website stats and I do use Google Analytics which is 100% free and I feel the best for managing multiple websites and domains
So how do you start off?
Go to Google Analytics and create an account. If you are already a Gmail user, just sign-in using the same login credentials and start configuring.
Click on the Add Profile Link as shown on the image above and enter the website details

You need to enter your website URL and the Time Zone and click on the continue button as you see in the image above

You need to select the code, I prefer to use the New code, Just copy that and paste it on the footer.php of your selected wordpress template file before the tag

Once you complete it, just click on the finish button, you will get the page shown above. Once you add the tracking code to your template and click on the Check Status link, you will get the message shown as on other websites (Please refer to the image above)
Now you are done, just go to the view report link and explore the different reporting system
I will be posting a page on using the reporting system soon
You should first Creating content for your blog, and do the necessary for Traffic for your blog, before you start analysing your traffic.