Start in a standing position with your feet about shoulder width apart or a little wider. Toes should be pointed straight ahead or turned out somewhat. Begin movement by bending your knees and lowering your hips towards the ground. The key is to make sure you move your hips back as far as possible during the descent, instead of your knees moving forward. Your knees will move forward some, but if your hips are over your ankles, it puts unwanted stress on your knees.
Another important point is to keep your hips, knees, ankles, and toes aligned as much as possible. You should ideally be able to draw a straight line between these joints. Finally, the movement should be slow and controlled (no bouncing at the bottom) and your heels should stay on the ground throughout the squat. These technique tips are the difference between an effective lower body strengthening exercise and a knee damaging exercise.
For added benefit, you can actively tighten your glutes as you are standing up from the bottom position. Perform 15 reps of the exercise and breathe out while you are standing up.