Domain transfer is moving your domain from one domain registrar to other, a domain can be transfered if the following conditions are met:
The domain name must be active
The domain name must be unlocked
The whois information must not be protected
The domain transfer code, EPP code should be known
Once the above conditions are met, the above information is to be given to the registrar to whom you want to transfer your domain.
Your new domain registrar initiates the domain transfer using the information you have provided, a transer authorization confirmation email is sent out to the email address specified as the "registrant" email address in the whois details of your domain, usually, a link is sent in the email, clicking on which confirms the transfer authorization.
Once the transfer authorization completes sucessfully, your domain gets pooled for transfer, generally, it may take upto 5-7 days to get your domain transfered.