Holding the yarn: Wrap the yarn around the fingers as shown. The idea is to be able to grasp the yarn and control the flow through the fingers. The LH needle is held with the thumb and middle finger.
Knitting:Insert the RH needle into the next stitch and manoeuvre the tip of the needle from back to front and from right to left around the strand of yarn being held taught in the left hand. Draw the tip of the RH needle through the stitch, hooking the loop at the same time, then drop the stitch off the LH needle.