neoaikon

If the ship is in front of you then get into a slightly lower orbit, otherwise get into a higher orbit and wait for it to come to you. Then just watch the separation indicator and when you see an orbit that brings you close to your target you raise your apoapsis at some point in that orbit to your targets orbital height, then when at apoapsis you should be very close to your target, circularize there and you should be moving very slowly relative to your target. Then just use RCS to move toward the target and dock.

Do you have any mods installed? Particularly RemoteTech2?

How fast are you going at 10km? And are you viewing the surface or orbit velocity. A prograde marker dipping slightly below the horizon in surface mode is OK, as you'll eventually gain enough horizontal velocity to raise it again. In orbit mode it's bad because it means you've passed apoapsis and are now descending, and you'll need to start burning more radially to compensate.