Peach trees typically set too much fruit. Unless you thin it out, you will have lots of small fruit and not many of the nice big eating peaches. Thinning should take place when fruit development has reached marble size up to the size of a quarter. By then you can get a good idea of how much fruit has set and is holding on the tree.
Thinning is performed by simply twisting or rubbing off the small fruits. Thin the developing fruits so that you only have one fruit per 5 to 6 inches of branch. I like the fruit I leave to be on the underside of the branch. This makes them less visible to passing birds that might like to take a bite!
By thinning, more of the tree's energy is available to go into fewer fruit. The result is fewer but larger fruit--better for eating!
Below is the same branch after thinning. The tree will put more energy into fewer fruit, resulting in big delicious peaches!