I was curious to know how to create a proper no follow link using html <a href="http://yoursite.com" rel="nofollow">YOUR TEXT</a> Code (markup): is this the correct way to do it?
yes , you are. In case you dont want bot follow your link to other site you must enter rel="nofollow" to tag <a> it effect with google bot as I know.
a link using the 'no-follow' tag will look like this: <a href="http://www.ibm-laptop-batteries.co.uk" rel="nofollow">ibm laptop battery </a>. When a search engine sees a 'no-follow' tag in an HTML link, it will not follow it, nor assign link popularity to the destination page. Search engines are encouraging blog software vendors and blog owners to use the 'no-follow' tag in blog comments and signature links. The theory is that if search engines stop following those links, spammers will stop posting.