With your dog standing in front of you hold a treat in front of his nose and move it back over his head. As he tilts his head back to follow the treat he will bend his hind legs and lower his bottom to the ground (it may take a few tries). The very instant his bum hits the ground click the clicker and give him the treat. Repeat this process about ten times.
Now it's time to fade the lure so that he sits without you having to use a treat to lure him into position.
This time, without a treat in your hand make the same movement over his head as if you had a treat in your hand. When he sits click and treat. Gradually make smaller and smaller hand movements until you don't have to make any hand movement at all and merely standing in front of him with a treat in your hand causes him to sit for the click and a treat.
Now that he's learned how to sit, and is sitting whenever you have a treat in your hand, it's time to teach him the cue for this behavior. The second before his bottom touches the ground say, "sit," and click and treat. Continue doing this, gradually saying sit earlier and earlier until you are saying sit before he sits.
And presto! You've taught him how to sit!
From now on, only click and treat him if he sits after you've given the cue to sit.
It might seem odd, but in clicker training you don't teach your dog the name of the behavior (the cue), such as sit, until after you've taught him how to do the behavior. Dogs don't understand English, so saying sit before he knows what sit means is pointless. In clicker training the name for a behavior, such as sit, is called the cue (as opposed to other types of training where it's called the command).
When giving the cue, such as sit, you don't need to say it repeatedly or in a loud voice. Simply say the cue once -- sit -- in a calm voice, and then give your dog time to respond.
Next: Sit (Shaping Method)