Picking Grip
The traditional picking grip involves holding the pick with the thumb and the last joint of the first finger. There are variations on this grip but I recommend trying this method, as it will prove more efficient in most applications.
There are essentially two right hand positions when using the pick. The first is closing the fingers of the right hand, and the second position is opening the hand across the face of the guitar. Try both positions and decide which one you are most comfortable with.
To assist with keeping the right hand steady when picking, try bracing the fourth finger on the face of the guitar as shown in the accompanying photo. This position is particularly helpful in picking situations but is not used when strumming.
All notes must be fretted with the tips of the fingers and positioned as close as practical to the fretwires.
There are basically two positions for the left hand. In most cases the left hand thumb should be positioned behind the neck of the guitar with the fingers evenly arched over the fretboard.
When using techniques such as the bend, release bend, vibrato etc. you may find it more comfortable to have the left hand thumb in a higher position, wrapped over the top of the fretboard.