u select your depth you want the bait to go then if u get a nibble u click some jig thingy and u pull it in slowly .-.
Depth decides what type of fish you want to aim for (same for mining). Each fish (or ore/log for the other gathering classes) has a certain level, called the sweet spot. It's a good system considering that people usually only want a certain item.. Sure you'll still get the occasional randoms, but it means when you're after a certain type, you can severely increase the proportion of what you're aiming to over the random ***.
The rest is a hot and cold game, the higher you are in relation to the area the less close you have to be, there's even a favored spot for certain areas, pay close attention to the spot on the meter when you successfully pull something up, when you start to see that spot repeat over and over, pick that spot on the meter from then on, a lot of times you won't even have to do it a second time.