The first and perhaps most easily understood way to describe an object's position in the sky is the local coordinate system. It is called local because the coordinates are only valid for a specific time and location on Earth.
In this system any object in the sky can be given two ordinates, known as azimuth and altitude. Azimuth is the angle to the object, measured in degrees from the north (celestial north, not magnetic north). North is at zero degrees, east is at 90 degrees, south is at 180 degrees, and west is at 270 degrees.
But azimuth is not enough! We need another angle to fix the position of any given object. This is where altitude comes in.