Delvero, wire covered in cloth or plastic is called insulated. Shielded means that there is also a foil under the cloth or plastic. You can not wire a circuit without insulated wire. Shielded wire is best for these circuits but not necessary, I only use shielded wire on pro series instruments.
What kind of pickup are you using?
Here's a wiring diagram to follow to get the proper circuit.
You can test the completed circuit by holding the pickup above the strings of another guitar. Or you can hold a dremel or electric drill over the pickup and use it as a tone generator.
If you're not good with electronics I can supply everything you need presoldered.