When shading with pencil, specifically Prismacolor pencil, there are two basic ways to do it: Side shading and Tip, or Point, shading.
Side shading is accomplished by using the side of the lead. It is smoother and can cover more area. It should be used most often.
Tip shading is accomplished by using the tip, or point, of the pencil. It is good for small spaces only. When taken into bigger spaces, it adds up to a non-smooth texture that skips (lighter or white space in between lines).