With ray tracing, you cast an imaginary ray from your eye to each pixel of your monitor and you follow that ray until it hits some kind of object behind it.

And then when you hit that object, you cast more rays from that intersection hit point: - to light sources and see whether or not there's some other object between that intersection and the light source. This determines shadows. - to the reflected position of the initial ray, to calculate reflections. - ...

It's a recursive process where you gather light values as you go, the combination of which gives you a final color for the pixel through which you shot that initial ray.