It's hard to verbally explain how to spin yarn, but I thought I'd try to capture it in pictures.
The wheel spins and that is what twists the fiber into the circular yarn shape. My left hand holds the fiber and the twisting from the wheel comes up to where that first hand is placed:
Now my other hand is on the cloud of fiber, pulling the strand so fiber into a neat form so that it can twist into yarn. This is called "drafting" and it is the essential part of spinning yarn. It's also the point where most people struggle.
Here is the start of drafting - you can see the cloud of fiber is pulled more straight than in the picture above where it is at a stand still. I keep pulling it straight with my right hand = drafting.
I wish I had another hand so that I could take a picture of drafting in action. If I can get one I will insert it here.
From cloud to drafting to yarn: