We don't understand cards in play vs. cards in our hands

Hello!

We've played Munchkin a few times and are a little confused about cards in play vs. cards in our hand.

• Should we place all of race, class, armor and weapons cards in front of us (in play), but turn sideways those cards that we do not or cannot use? If so, is there any reason we may want to hold these cards in our hands?
  
• If we want to use potions or curses during a battle, should those cards be in play?
  
• If we want to use potions or curses against other players, can those cards be in our hands or do they need to be in play?
  
• How does trading work? We can only trade those items that are in play?
  
• And, is someone required to kick in the door the moment it is their turn or can they do other things first?

Thanks!

We don't understand cards in play vs. cards in our hands