The idea is to trace a line around the subject, capturing as little of the background as possible. Once you're done making your selection, a dotted line will flash around the selection.
Regular Lasso: Click and drag to draw a line around the subject. Magnetic Lasso: Click the mouse once on one edge of the subject you want to preserve, then slowly move the mouse around the subject (without clicking). Once you've surrounded the whole subject, click the starting point to finish the selection. If you need to zoom in for a closer look, press Control++ (PC) or ⌘ Command++ (Mac). To zoom out, press Control+- (PC) or ⌘ Command+- (Mac). To undo your last action, press Control+Z (PC) or ⌘ Command+Z (Mac).