If you play in C#, you will be flat

If you want to find the right key, you need to have a basic understanding of key signatures. Here's a crash course:

We'll start with C major, because there are no sharps or flats in that key. The notes are (C D E F G A B). That gives us 7 notes to play around with. Let's see what chords we can construct from these notes;

C E G B - C Major 7 (I)
D F A C - D minor 7 (ii)
E G B D - E minor 7 (iii)
F A C E - F Major 7 (IV)
G B D F - G dominant 7 (V)
A C E G - A minor 7 (vii)
B D F A - B minor 7 b5 (viib5)

Thus, we see that in the key of C major we have 3 major chords (CM7, FM7, G7), 3 minor chords (Dm7, Em7, Am7) and one half diminished chord. This is important because it helps you identify common chord progressions. For example, if you had a ii V I progression in the key of C Major, it would be Dm, G, C. You could also have, as is common in blues, a I IV V I progression. In the key of C that would be C, F, G, C. Usually, the song will resolve back to the I chord. This may not always be major, it might be minor, if it was in a minor key. For simplicity, it's sensible to relate the minor key back to the major. So, if we had Bm7b5 E7 Am, we can relate that back to Am/C major. Note that the Em7 from the key of C is made into a dominant chord to create a better resolution to Am. You could just as easily apply this concept without the 7th interval. in which case you'd have major, minor, and diminished chords to play around with.

In terms of keys, the sharp keys move up in cycles of 5ths. Thus we have
C major - no sharps no flats
G major - F#
D major - F# C#
A major - F# C# G#
E major - F# C# G# D#
B major - F# C# G# D# A#
F# major - F# C# G# D# A# E#
C# major - F# C# G# D# A# E# B#

We've already got 7 sharps, so lets work with the flat keys now. These move in a cycle of 4ths
C major - no sharps no flats
F major - Bb
Bb major - Bb Eb
Eb major - Bb Eb Ab
Ab major - Bb Eb Ab Db
Db major - Bb Eb Ab Db Gb
Gb major - Bb Eb Ab Db Gb Cb
Cb majore - Bb Eb Ab Db Gb Cb Fb

Once again, we've run into 7 flats so we can stop. Right now you're probably thinking "There are 12 tones in the chromatic scale, why do we have 14 scales?!". That's because some of these are what we call "enharmonic". The following scales are enharmonic

B major - Cb major
F# major - Gb major

Thus we are left with 12 "unique" scales.

Now you might ask, how is this of any use? If you take any given song, and you identify the chords in the song (even if they are power chords!), you'll be able to identify what sharps/flats are being used. This will allow you to deduce what key you're in.

The more you practice, the better your ear will become. However, when you're first starting out it can be really hard to identify the chords. The first thing you need to do is identify the bass note, or the lowest note in the chord. Listening to the bass line is a good start. The useful thing about the bass line is if you work out what the bass notes are, you'll have some insight into what key a song is in fairly quickly.

For example, if the bass line goes B E A, then one might deduce that this might potentially be Bm7b5 E7 Am7, or Bm7 E7 AM7. This immediately narrows down your search to two possible keys, A minor or A major. Of course, sometimes you'll encounter inverted chords (i.e. chords with the 3rd or the 5th or the 7th in the bass) or substituted chords. That's where theory comes in handy!

Once you've identified the lowest note, try and pick apart the chord note by note. Eventually you'll be able to hear a chord and identify whether it's minor or major pretty quickly. To take it one step further, after you've done this enough you'll be able to identify common chord progressions at the drop of a hat as well.