The arrow wont pop up for me even though I've added the add-in.
The arrows won't come if you're in Drawing mode. The auto trace functions is only for models.
See also;
2016 SOLIDWORKS Help - Sketch Picture
2016 SOLIDWORKS Help - Converting Sketch Pictures to Vector Data
2016 SOLIDWORKS Help - Sketch Picture PropertyManager: Page 2
The arrows won't come if you're in Drawing mode. The auto trace functions is only for models.