A typical (Silva type) compass consists of a magnetic strip of metal, suspended or pivoted (so it can swing freely) within a moveable dial. The dial is usually liquid filled (this dampens the oscillation of the needle allowing it to settle into position much more quickly) and has several parallel lines marked on the dial itself. The compass should have a clear plastic base plate with straight edges. Along the edges should be scales in both metric (cm and mm) and imperial (inches). Some may have additional features such as a magnifying area and degrees of declination/magnetic variation (usually marked on the compass dial). A wrist strap is another important feature if you want to keep the compass.
There are usually 3 different types of arrow marked on the compass. As indicated in the diagram, the vertical arrow marked on the plastic background is your direction of travel arrow. This is the only arrow you ever follow.
The arrow that spins in the middle of the compass (usually coloured red and white) always turns to point north (the red end is the end that points north). NEVER follow this arrow (because you will always be walking north then, no matter where you actually wanted to go!) When using a compass try not to hold it near any metal or any magnets else this arrow will be attracted to them and you will end up going in the wrong direction. Depending on where you are simply placing the compass near the floor may give you an inaccurate reading due to iron and mineral deposits in the ground. Always check you have the same reading at ground level and when standing up.
The third arrow is the one that will be marked upon the dial. (you cant actually see this on the picture). It is usually a red arrow marked on the bottom of the dial. This is the one that will match up with the red and white pointer that spins. When you want to read a number off the dial, look at the point where it touches the line at the top (the one marked by ‘read bearing here’), this is the number you want.