The CAGED System
Lets move on to the 2nd of the 5 areas which features the A major chord shape. If you know how to play these barre chords already, you already have a good start for this area. The same major barre chord shapes are found in the CAGED system as well. The following is the chord shape, arpeggio and scale for the next area, using the 'A major open position chord shape'. This example is in the key of D.

To help memorize these shapes continue to use the same exercise as shown in Part I in which you play the scale, then arpeggio and finally the chord in sequence.
So far our areas have featured the lowest root note on the 5th string. In our case the note D, located on the 5th fret. For consistency we will stick with the same key of D but these next areas, as we move up the neck of the guitar, feature the root note on the 6th string instead of the 5th string. The first of these areas features the G major chord shape. Here is the chord shape, arpeggio and scale.

You may have a hard time finding the G Major chord shape in this one. The chord form is actually more prevalent in the arpeggio diagram as opposed to the chord diagram. When attempting to find open position chord shapes in these diagrams, remember to account for the open strings in those open position chord shapes.
The next area features the E major chord shape. When moved up the neck, this is a barre chord that has already been discussed here. Here is the chord shape, arpeggio and scale diagrams.

The final area features the D major chord shape. The diagrams are again in the key of D but the lowest root note is now located on the 12th fret of the 4th string. Here is the chord shape, arpeggio and scale diagrams. The open position chord is more likely to be found in the arpeggio diagram instead of the chord diagram.

Those are the 5 main areas on the guitar neck or what’s called the CAGED system. Remember that even though those open positions chords shapes are inside those areas, you are not playing those chords, just the same shapes. What you have done was move that chord shape up the neck effectively transposing the chord. Instead of playing a C Major chord for example, by moving up 2 frets you are playing a D Major chord. Same chord shape, different chord.
Remember to use the exercise found in Part I of playing the scale, then arpeggio and then the chord in sequence for each area of the neck. You will be surprised how your knowledge of the fretboard will increase in such little time.
So why is the CAGED system or 5 main areas useful?
By dividing the guitar neck into these 5 areas, we optimize the guitar neck to make playing easier on the guitar. These areas create fingerings for chords, arpeggios and scales that are easy to remember and play. By learning these areas we have greater knowledge of the fretboard which gives us the opportunities to play more inspired and creative music.