In Illustrator, go to: 

• File > Open
• And select the .JPG, or .PNG file that you would like to bring into Illustrator. 
  Or
  Drag the file from the folder it is in, onto the Illustrator window. 
  Or
  File > Place

This will create a new tab, or project, of your image file. 

Select the image you want to trace: Click open

* Note that high contrast, low colour images work best. 

Your image may be too large for your artboard dimensions.

The black line here is indicating that the photo is too big for the artboard.

If you need to resize the image:

First, determine how big your artboard is, and remember these dimensions or write them down. 

Click on the Artboard tool.

There are two places you can view the size of your art board. 

The top toolbar will show you the dimensions.

As well as the location, on the side Properties panel.

Change the photo to fit the size of the greater of the two dimensions.

With the Selection tool selected:

Click on your photo to select your photo (The blue line around your photo indicates that it is selected) 

Now, click on the Properties panel.

The chain icon with a line through it shows that your dimensions are not locked. 

Click on this to Lock your Aspect Ratio (constrain the proportions).

Resize the photo to match the one dimension that is the greater valued dimension.

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ie. If the artboard is 8.5 X 11 inches and your photo is 20 x 30 inches, resize 30 to 11 and the photo will now fit the artboard (as long as the dimensions are locked).

This photo is now resized. Notice that it fits this artboard, as it does not pass on to the grey background.