This is a great and important topic. For those of us who've been playing for a while, it's a great way to stay connected to the fretboard; grounded in the melody, which comes from the chords.

Anyway, I wanted to post some graphics and information to help beginning and intermediate players see the connections. Forgive me if I go back to a few basics just to make some points.

The acronym CAGED represents the moveable forms of C, A, G, E and D. These chord forms are connected on the neck in this same order--always, and each form is the same musical chord. Even if we started with the A form, the next form connected to it up the neck would be the G form, then the E form, etc. CAGED, AGEDC, GEDCA, EDCAG, DCAGE. No matter at which fret we start, it's always the same. This is one of those truths about the guitar neck that is as solid as a rock.

The best way to start understanding this is to look at a C chord and follow it up the neck.

.......1.......2.....3......4......5......6......7.......8......9......10.....11....12......13....14

E ||-----|----|--x-|----|-----|----|-----|--x--|-----|-----|----|--x--|----|----|
B ||--x--|----|----|----|--x--|----|-----|--x--|-----|-----|----|-----|--x-|----|
G ||-----|----|----|----|--x--|----|-----|-----|--x--|-----|----|--x--|----|----|
D ||-----|--x-|----|----|--x--|----|-----|-----|-----|--x--|----|-----|----|----|
A ||-----|----|--x-|----|-----|----|--x--|-----|-----|--x--|----|-----|----|----|
E ||-----|----|--x-|----|-----|----|-----|--x--|-----|-----|----|-----|----|----|

Remember that each one of these chord forms is producing the C chord in the next shape up the neck. Notice how they connect from one to the other and that each chord shape shares notes.

.......1.......2.....3......4......5......6......7.......8......9......10.....11....12......13....14

E ||-----|----|--x-|----|-----|----|-----|--x--|-----|-----|----|--x--|----|----|
B ||--x--|----|----|----|--x--|----|-----|--x--|-----|-----|----|-----|--x-|----|
G ||-----|----|----|----|--x--|----|-----|-----|--x--|-----|----|--x--|----|----|
D ||-----|--x-|----|----|--x--|----|-----|-----|-----|--x--|----|-----|----|----|
A ||-----|----|--x-|----|-----|----|--x--|-----|-----|--x--|----|-----|----|----|
E ||-----|----|--x-|----|-----|----|-----|--x--|-----|-----|----|-----|----|----|

The formations start over again at the 12th fret, repeating what started at the beginning, the nut. So if you look at the first C form, picture the nut of the guitar as a capo at the zero fret. When you look at the second form, the A form, picture a capo on the third fret and you're playing a A chord. Well, you're actually playing a C chord, and so on up the neck.

How about when you get to the D form at the twelfe fret? Isn't this just as if there were a capo on the twelfe fret and you could play a C chord? Interesting...

To learn and to play each shape alone is a great challenge. Most of us usually learn the E and A shapes, occasionally the C and the D shape and use them as barre chords up and down the neck. But for our purposes today, just try and play the C chord in the C formation, the C chord in the A formation and so on up the neck. For right now, it's not as important to learn to play the shapes as it is to see and feel the connections between shapes; how they relate to each other.

Let's break it down.

It's all about the 1-3-5. This is where it begins, and this is how you can start to learn to improvise up the neck. The 1-3 and 5 notes of a C chord are a C, G and E notes. Check out how they connect to each other on the fretboard.

.......1.......2.....3......4......5......6......7.......8......9......10.....11....12......13....14

E ||-----|----|--G-|----|-----|----|-----|--C--|-----|-----|----|--E--|----|----|
B ||--C--|----|----|----|--E--|----|-----|--G--|-----|-----|----|-----|--C-|----|
G ||-----|----|----|----|--C--|----|-----|-----|--E--|-----|----|--G--|----|----|
D ||-----|--E-|----|----|--G--|----|-----|-----|-----|--C--|----|-----|----|----|
A ||-----|----|--C-|----|-----|----|--E--|-----|-----|--G--|----|-----|----|----|
E ||-----|----|--G-|----|-----|----|-----|--C--|-----|-----|----|-----|----|----|

By now I hope that there are some lightbulbs going off! As dvenetian is getting at, there's alot more to it. But this is a very good place to start.

Have fun!

Steve