How to catch pokemon

You swipe the balls upwards to hit the Pokémon itself.

If you hold the pokeball you can see a green circle growing smaller, if you manage to land it inside the green circle you get bonus xp based on how small the circle is.

Also, according to some people you have a better catch chance if you catch the pokemon when the inner circle is smaller.

I hope this is clear, if it isn't just leave a comment and I'll try to explain better.

From the Pokecommunity guide (emphasis and hyperlink mine):

To throw the Poké Ball, tap and hold on the Ball. Circles will appear over the Pokémon, one which is coloured (said colour indicates how ‘catchable’ the Pokémon is; for instance, green = easy, and red = hard) and diminishes in size. You want to throw the Poké Ball when that target ring is as small as possible to increase your chance of catching the Pokémon.

To fling the Poké Ball, swipe upward directly at the Pokémon. You may need to use the full screen for your swipe, as otherwise the Poké Ball will fall short. Be sure not to throw it sideways! If you drag and spin the Poké Ball before you throw it, you can get a ‘curveball bonus’.