A clipping path forms a stroke around an entity in your picture enabling you to detach the entity and put it in another picture. There are two ways a Photoshop clipping path can be formed. A magic wand tool is the easiest option. It is located in the tools palette.
Photoshop samples the color of that pixel when you click on a part of your picture. A clipping path around any part of the picture with similar shades of that color is then formed by Photoshop. However, with complex images, this method can cause jagged edges or ghosting.