How can I transform nested XML elements with xslt?

I am new to XSL and want to transform nested XML elements with xslt. I have a source XML file that contains the following structure:

<versions xmlns="urn:stock-quotes">
  <version>
    <mdata>Ma</mdata>
    <state>open</state>
      <version>
          <mdata>Da</mdata>
           <state>open</state>
             <version>
                <mdata>Ga</mdata>
                <state>open</state>
                    <version>
                       ...
                    </version>
              </version>           
       </version>    
  </version>
</versions>

How can I transform this XML with xslt?