Step one:
First draw a circle.
Step 2:
Inside, draw another circle as the main body of the compass.
Step 3:
Draw a square and ring on top of the circle as a pendant.
Step 4:
Draw a small circle in the middle and pointy pointers on both ends.
Step 5:
Write the four letters "N S W E" up, down, left and right respectively to represent the direction.
Step Six:
Draw a decorative pattern in the middle and add some decorative lines.
Step 7:
Finally, just paint the drawn compass with a beautiful color.