"When I contribute to a Traditional IRA I'll be using post tax dollars? which is why it doesn't get taxed when converting it from a Traditional IRA to a ROTH IRA?"
Correct! You would be putting after-tax funds into your Traditional IRA (taking no deduction for your contributions). Then, when you move them to the Roth IRA, they are still after-tax dollars so no taxable event occurred.
One "gotcha" to be aware of - when executing a Backdoor Roth, you must take into account any and all Traditional IRA accounts that you own, no matter where they are held. So, to give an example.
You have a Traditional IRA at Broker A with $50,000 in it. This is all pre-tax contributions and earnings.
You fund a new Traditional IRA at Broker B with $6,000 of after-tax dollars and convert it to a Roth.
In this scenario, you would NOT have a fully tax-free conversion to Roth. You cannot designate specific dollars to convert - it is done pro rata across all IRAs. In this example, your total Traditional IRA balance is $56,000, of which $50,000 is pretax and $6,000 is post-tax. So if you converted $6,000, your conversion would be 6/56 non-taxable and 50/56 taxable.
The way to avoid this is to ensure you don't have any other Traditional IRA accounts in existence at any time during the year that you're doing the Backdoor Roth. If you have other Traditional IRAs, one way around this is to roll them into a 401k, because the calculation only considers IRAs, not Qualified Plans.
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