Before the development of sophisticated electronic and sound detection systems, navigators calculated directions from objects in the sky—the sun, the North Star, and the moon. A much more reliable guide for finding direction is a magnetic compass, which works at all times of the year, in all weathers, and in most places. When a piece of magnetized iron is placed on a splinter of wood and floated in a bowl of water, the wood will swing until the iron is pointing north and south. Any other direction can then be found.

On ships the magnetic compass is usually carried in a stand called a binnacle. It holds a bowl containing the compass card with its needles mounted on a pivot and has a provision for illuminating the compass face from below. The bowl is filled with a nonfreezing liquid on which the card floats to reduce vibrations. On the forward inside edge of the bowl is a vertical line called a lubber's line. This marks the “dead ahead” of the ship. In steering, the helmsman watches the mark for his course on the compass card, keeping it always opposite the lubber's line.

A compass aboard a ship is affected by the magnetic force of the ship itself, which acts like a huge magnet. The effect of this magnetism on the compass is called deviation. It is measured by the angle between compass north and magnetic north. Variation and deviation together pull the compass away from true north by an amount called compass error.

Navigators remove most of the deviation by compensating the compass. They take the ship to a range where they line it up with markers indicating the four cardinal points. Then they “swing ship” by pivoting the craft so that the bow points in turn to each of the markers. They remove the deviation on each heading by placing counteracting magnets in the binnacle—these magnets serve to cancel the magnetic effects of the metal in the ship.

In an effort to develop a navigational instrument whose accuracy would be unaffected by stray magnetic fields, the gyrocompass, which does not use magnetism, was developed. Gyrocompasses are often used in modern navigation systems because they can be set to point to true north rather than to magnetic north. Today large ships carry both magnetic compasses and gyrocompasses.