If you're retracing a whole design:

  1. Go to the designer if you're not already there.
  2. Click on the button at the top left and choose Import Design. This assumes it's saved as a picture file: JPG, PNG, etc. Turning on the Fade option usually, makes it easier to distinguish new lines from old.
  3. Draw over each line.
  4. Select the eraser tool and double click on the original image (away from the lines you drew) to delete it.