The same note can often be played in more than one place on the guitar fretboard. To avoid confusion, the fretboard can be divided into positions consisting of groups of four frets to go with the four fingers of the left hand.
The lowest fret of the group of four determines the name of the position. E.g. if the first finger is at the first fret, the other fingers follow naturally at frets 2, 3 and 4. This is described as the first position. If all the fingers were moved up one fret (first finger at the 2nd fret) this would be called second position, etc. When using the open strings as the lowest notes, you are playing in the open position. This consists of the open strings and the first three frets; as shown in the photograph below.
For the following exercise it is important to pay careful attention to the use of the left hand fingers. Do not worry about the note names for now, just follow the TAB. Remember to place the tips of the fingers close to the fretwire to avoid buzzing sounds. It is also important to keep the palm of the hand parallel to the neck, so that the fingers are stretched. This helps develop independence of the fingers. All fingers should be equally strong, that is, it should not be easier to play with one finger than the other.