Booth's algorithm allows for the binary multiplication of a positive multiplicand and negative multiplier. It involves 3 steps: 1) Representing the multiplicand and multiplier in binary, with the negative multiplier represented in 2's complement form. 2) Recoding the bits of the multiplier according to Booth's recoding table to translate it into a signed-digit form. 3) Multiplying the multiplicand by the recoded multiplier through successive additions or subtractions of the multiplicand according to the recoded bits. The result is the binary product of the positive and negative values.