If you take anything away from this project, please let it be this step. This step covers how to magnetize the needle for your compass, and how to read the results.
How to magnetize:
In order for your compass to point in the right direction you need to magnetize the needle, and you need to know how to do it correctly. Omitting or erroneously applying this step will result in a failure.
To magnetize your needle you need to stroke in the magnet along the needle in one direction,
from eye of needle to point about 10 times. If using a paperclip or other portion of magnetic metal that isn't easily polarized by geometry, how can you tell which way is north? Make a small mark or indentation in the metal to determine which end to stroke towards, and always stroke toward the tip of the needle or mark on your paperclip. If you don't have a magnet you can magnetize the needle by using a piece of silk or other sheer fabric, again stroking on one direction. If you use silk you'll need to stroke needle about 50 times or more.
How to read the bearings:
When the needle is magnetized it will be positively charged, meaning it will be attracted to a negative and repulsed by positive magnetic fields. once magnetized the tip of the needle will be polarized and will point towards the strongest magnetic pole, meaning north in the Northern Hemisphere and south in the Southern Hemisphere. From this initial bearing you should be able to determine the remaining cardinal bearings by drawing an imaginary line perpendicular to the needle bearing. Facing north, east is on the right with west on your left.
Remember, this information orients you based on magnetic poles, not geographic poles. More skilled compass users can ascertain the magnetic declination
and determine true north from the readings. But this is optional and may not be required for rough readings.