I will not get into how the charger works its self, but if your asking about the balance leads ill try and help this thread will be ok for that.
Basicly the hobby charger has two types of leads the main charge cables and the balance leads.
The main charge leads are red + and black - easy seen in my pictuers as the thicker leads.
The balance leads are skinny and can be made from colours from red + blue, yellow, orange, white, brown and black - depending on how many batteries your trying to balance and the type of lead as some of the cheaper ones will only have one red + and the rest black.
Take a 2s balance lead as an example its for balancing 2 cells (batteries) it will have 3 wires one red + the middle will be either white, blue or black depending on the lead maker and the last one will be black - to make a balancing lead like i have done, the red + of the balancing lead needs to go to the red + of the main charge lead, the black - needs to go to the Black - main charge lead, its simple if there is only one red + and the rest are black since there is only 3 wires its the one the most distance away from the red + one. The middle balancing wire is easy this one goes inbetween the two batteries by its self, so now the charger can pick up induvidual battery or cell voltage, the batteries must be lined up -+ (in series).
Here is a picture of a 2s balance lead.
The black line ive drawn in at the female end need's to be cut off and the above instructions followed then solder the made up balance leads to magnets or your choice of battery holders, i sugest starting out with a 2s lead first as it will help you get your head around it.
It should like some thing like these two.
When making 3s, 4s, 5s and 6s balancing leads the same follows, the red + of the balance lead goes to the main charge lead and the one on the opisite far side of the plug will be back - and that goes to the black of the main charge lead, but keep in mind the one next inline to that has to stay next inline meaning the black - main charge lead and the black - balance lead soldered together go on the first - end of the battery and the one next to that goes on the other end of the battery, and you keep this in order untill you get the red + of the balance and main charge lead as that will be on the + of the last battery, if that makes sense ?
If you start off with a 2s balance lead so you can balance charge two batteries at once, it will be a good starter and then you will know what i mean, im crap at typing, spelling and im a little smashed, i hope that helps if not and you need some thing made more clear just ask.
All itmes needed can be brought of ebay or hobby king really cheap and if you do make a mistake the hobby charger will come up with an erro of over or under voltage and so on and will beep and will not let you charge. I hope that helps Shane