Holding the yarn: Wrap the yarn around the fingers as shown. The important thing is the ability to control the flow of the yarn through the fingers and around the needle.
Knitting: Insert the RH needle into the next stitch. Stretch the index finger of the right hand towards the tip of the RH needle and wrap the yarn around the tip of the needle from back to front and from right to left. Draw the tip of the RH needle through the stitch, hooking the loop at the same time and drop the stitch just worked off the LH needle.