This guide contains everything you need to know in order to fish.
Guide to Fishing
Fishing Rod Unlock
In order to fish, you need a fishing rod. Unfortunately, you can't craft one right away. You have to wait for Brram, the Quido chef, first.
His ship will arrive in the shape of a UFO with green toadstools. Talk to him.
One of his first quests should be to catch a fish. He will give you the fishing rod recipe. The recipe calls for two wood, one metal, and one thread.
Wood can be simply obtained through the action of cutting down trees. Metal can be obtained through mining on rocks, as a rarer drop.
At this point, thread should already have been unlocked with the arrival of Locke on the planet. You can craft thread with two pieces of cotton.
Go back to your house and enter the Forge. There you have it, a fishing rod!
The actual fishing is trickier than crafting the fishing rod itself. You have to be patient with a steady hand.
As a requirement, you have to have larvae in order to fish. You can buy larvae from Brram for 6 coins apiece. There is one larvae spent per fishing trip. You do not lose your larvae if you cancel the action. You can only lose a larvae if you catch a fish or fail at catching a fish.
Go to the small lake near your house. If you are close enough to it, it should read "Press Space to Fish." Press Space. It will show a fishing interface, including a slider.
The first thing you want to do is move your bait towards the silhouette of the fish using the keys WASD. The slider should start moving once you are close enough to the fish.
Choose a key. It will either be:
When the slider goes over its blue section, a button of one of these choices should appear. If your button does not appear right away, don't worry, just wait. Eventually it should come to your button.
Press the corresponding button that is shown on screen. Congratulations, you caught a fish!