Copy the file from :
Path: app\code\core\Mage\Catalog\Block\Product\List\Toolbar.php
Paste to :
Path: app\code\local\Mage\Catalog\Block\Product\List\Toolbar.php
[ Create folders if not available ]
in above file find bellow code
if ($this->getCurrentOrder())
{
$this->_collection->setOrder($this->getCurrentOrder(), $this->getCurrentDirection());
}
And Replace with bellow code.
if ($this->getCurrentOrder())
{
if(($this->getCurrentOrder())=='position')
{
$this->_collection->setOrder('entity_id','desc');
}
else
{
$this->_collection->setOrder($this->getCurrentOrder(),$this->getCurrentDirection());
}
}