Knowing what shot to play at a certain time is imperative. Most squash players will have heard that the squash court can be divided up in to 3 sections, the front, the middle and the back of the court.
The Front - The front of the court can be an attacking position or a defensive position, depending on how you ended up there. If your opponent has attacked effectively and played a good drop you are going to be defending. The two best options in this case are the counter drop, or a lob. If you counter drop making sure the ball is tight to the wall is key. If you lob it absolutely has to clear your opponent. If you get to the front of the court due to a week shot from your opponent you are attacking. This is one of the best opportunities in a rally to win a point. You get time to setup, hold your shot freezing your opponent and you have a lot of choice in what shot to hit. A good drop trying to angle the ball in to the nick is a good option. Another great option is to try and hold your shot making your opponent think you are going to drop, pulling them and then clear the ball past them with a good drive.
The Middle - If you get a ball in the middle of the court you are almost always going to be attacking. This does not mean that you should go for an outright winner every time but you should be aggressive. Make your opponent run. Work them around the court. If you have them stuck at the back of the court on their backhand side play a drop aiming to angle the ball in to the nick at the front of the court on their forehand side. If you have time and you can sense that your opponent is committing to cover a particular shot then hit behind them. Often times after you have trapped your opponent in the back and then drop it they get used to that pattern and you can use that against them as they guess at the same shot the next time.
The Back - You are defending from here! Your objective should almost always be to get your self back to the 'T' and get your opponent behind you. This can be done with a good straight drive or a good cross court drive. If you are finding it hard to get yourself out of the back of the court change how you are trying to do it. Perhaps you are trying a hard drive but your opponent is still able to volley the ball. Try going higher and softer to their backhand. This will give you more time to get out of the corner and if you hit a good shot they won't be able to attack it and will hopefully let it go behind them. Most shots in this situation should be straight but you need to cross court with good width occasionally or your opponent will not have to concern themselves with that side of the court making it much easier for them to cut the ball off.