How can activate the tool sketch picture?
Start a sketch then go to Tools>Sketch Tools>Sketch Picture..
You should be in sketch edit mode to insert a picture and also make sure that auto-trace is checked under tools > add-ins
This video might be helpful SolidWorks Autotrace a Sketch Picture
with permission of Dennis Bacon and Deepak Gupta.
I wanted to add the videos because I found them more descriptive.
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