Step 1: Feel awkward (generally, people do not expect to ever come face to face with a squid, considering they live underwater and we live on land. The impossibility of the whole situation will leave you in a slight state of shock, and we all know that those lead to awkward silences).
Step 2: Rise above the awkwardness and say hello as politely and gently as possible, and hope for an amicable response.
At this point, the squid will make one of two choices.
Its first choice will be to stare at you for a few minutes, then attempt small-talk. You will have to be patient with the squid, though. It is, after all, a squid, and many squids do not speak to humans. This squid will have gone to great lengths with great effort to try and learn your language. It wants to impress you, so be nice.
Remember to be nice.
You should continue the nonsensical friendly banter (as politely as possible) with the squid until it swims away (even if you're there for three hours), so you don't offend the squid and cause it to change its mind and make the other choice.
The squid's other (more likely) choice will be to surrender itself to its squidly hulk-like instincts, grow ten times larger, turn purple, and try to eat you. (Squids that do this first instead of trying to make small-talk probably have not learned any kind of language.)
At this point, you will need to stop screaming, compose yourself, and enter the squid's gaping maw with the acceptance that everything you've ever known will soon be gone.
Luckily for you, squid digestive systems are pretty simple. You just might survive this encounter-gone-horribly-wrong intact! With all your limbs! Hooray!
After you find your way out of the squid's you-know-what, try to swim away unnoticed. If, however, the squid notices its bowel movement, remain as still as possible and pretend with all you have that you are a turd. Poop holds no interest for squids.