North (N), east(E), south (S), and (W) should always be present on the compass line. Even if the player does not know where they are, this will allow them to orientate themselves with a constant point of reference.
Further directions can be added for greater detail if needed: northeast (NE), southeast (SE), southwest (SW) and northwest (NW).
Only part of the compass line is visible at any one time. This corresponds with the direction in which the player is currently facing. As the player turns, the compass line shifts as well so that it always shows the direction in front of the player.
Because a player can turn in continuous circles the compass line should also continuously repeat. So this:
Should become this:
Quest markers and nearby points of interest can be positioned along the compass line in their direction from the current location of the player. This allows the player to head in the general direction of a marker, without having to open up the full map to check they are on the right course.
Some destinations might be above or below the player. If this is the case it can be useful to place an up arrow above the icon or a down arrow below it, to give the player a better chance of finding it.
If there is room, this could also be achieved without arrows and instead positioning the icons above or below the compass line.
Marking the compass line with the last death location is a great way to help show the player a place they might want to avoid or where they need to go to pick up their dropped loot.