Almost every time I log in and check my rankings for this site, for instance, I see a slightly different position. For example, I was in position two for Aussie searches for the keyword phrase "SEO tips" for a long while. But over the last nine moths or so, the position has been moving up and down quite often. This variability seems to have been at its greatest over the last couple of months. Some days I'm in position eight or nine, then the next day I'm at five. Then I'm at three, then down to nine again. I've seen a similar level of volatility in my rankings for a couple of my other sites.
This can cause you a lot of angst because you see a huge fall in traffic if you drop out of the top three results. And there's even a substantial difference between positions one and two, and between two and three.
It's not a huge issue for me since I'm not depending entirely on income generated from my sites. But for business owners who had become accustomed to holding the top spot in Google for a targeted keyword phrase, the present volatility must be making them nervous wrecks!
I think this phenomenon is due mainly to the increasing sophistication of Google's algorithms. It's clearly becoming increasingly human-like in its ability to asses the quality and relevance of a web page.
So, how do you deal with this issue? Of course you can do things to lift your rankings, but it's increasingly difficult to dominate them consistently. If you're a webmaster, the whole issue is largely out of your hands. I think the best policy is just to not worry about it so much and accept things.
You should also remember that as long as you've done the fundamentals, there's a good chance that you'll reclaim your previous position eventually or at least not fall too far down the list.
That said, there's always a chance that a webmaster has decided to knock you off your perch for a certain keyword and will just keep plugging away until he does this. In that case there's not a lot you can do.
So, just keep adding quality content, sharing on social media sites, building and most importantly earning links. If you keep at it you will be rewarded by the search engines eventually, even if it's not in exactly the way you'd like.