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Where electrons hang out in the atom,
They are actually areas of probability.
In quantum mechanics the model of the atom has a nucleus composed of protons and neutrons with the neutrons holding the protons together. The electrons dont orbit the nucleus like the planets orbit the sun instead they exist in a cloud of probability at some point from the nucleus. The areas with the highest probability of having an electron present are those electron shells.
Due to the nature of atoms all atoms are trying to reach a stable number of electrons in their outer shell; this magic number is 8 or for those atoms smaller 2. The periodic table is laid out in this pattern because of this. Since hydrogen has only 1 electron in its outer shell it wants another and is willing to join with an element like oxygen to share an electron. But oxygen wants to have two electrons in its outer shell so it will normally bind with 2 hydrogen atoms creating H20 or water.