The starting point to citing your sources correctly is understanding the difference between direct (word-for-word) and indirect (paraphrase) quotations. Just remember: you still need to cite your reference point for both.
Let's go back to basics with this one.
Here are the three accepted methods for quoting from a given academic text:
i. Standard method
(a) Radcliffe writes, “Joy is as restless as anxiety or sorrow” (23).
This is the most common form of quotation: it’s structured like a piece of dialogue, with a comma introducing the quotation itself.
(b) Shakespeare begins by asking a question of his beloved: “Shall I compare thee to a summer’s day” (1).
Here the lead-in to the quotation includes a statement that needs exemplifying, hence the use of the colon.
ii. Running method
(a) Radcliffe writes that “[j]oy is as restless as anxiety or sorrow” (23).
Here the quoted phrase has been restructured to flow as seamlessly as possible with the rest of the sentence. In other words, it would be easily readable if the quotation marks weren't there. Note the use of square brackets to highlight any changes that you've made to the original source material (even changing from capitals to lower-case).
(b) Shakespeare asks his beloved whether he should “compare [her] to a summer’s day” (1).
Here those square brackets contain a necessary addition, since the sentence wouldn't make sense if the original “thee” was left in place. The indirect equivalent of this would be as follows: “Shakespeare asks his beloved whether he should compare her to a summer’s day (1).” Much simpler, and probably preferable in this case.
iii. Offset method
Use this for block quotations, which generally means five or more lines of prose.
Don't use quotation marks, unless the author is quoting something or someone else.
Indent the quotation from the left-hand margin. And always end the quotation as demanded by your style guide, before giving its reference. (I recommend Purdue University's Online Writing Lab as a one-stop shop for guides to all the major academic styles.)
One other thing to note: if you ever need to alter your quotations, your two most important tools are square brackets (as with the running method) and the ellipsis...
Use the ellipsis to omit something from the middle of a quotation and keep the focus plainly on what’s left. This is a helpful tool for isolating the relevant parts of a quotation that would be too long and unwieldy otherwise.
Cite only as much of the passage as you need to prove your point. If only two sentences in a passage are relevant, cite those two sentences, not the entire passage.
It's also worth putting square brackets around your ellipsis, just to make it clear that this is your choice and not the author's own.