Using rewards to encourage kids to trace/write letters never fails. Of course, you need to choose the right rewards and repeat multiple times with patience. Sometimes even a workbook can be used as "reward". Besides, emphasizing not giving up with work to achieve or get rewards is also important.
Here is an example:
A=Adult, K=Kid
(First day)
A: Hey dear, shall we start tracing letters today?
K: No, I want to do the workbook.
A: Oh dear, workbook is the reward. How can you skip the tracing part and get the reward directly?
K: Ok, I will trace. But it is too hard.
A: It is ok. I will help you.
K: But it takes too long.
A: What about this, you pick a letter. If you can trace & write both the capital & lowercase of this letter, I will give you a pink pencil and the workbook as the rewards.
K: Ok. Let me try.
(I opened the tracing book and she picked 'O')
K: I am doing circles.
(Kid did random drawing of circles~~)
A: Hey dear, do you want to do the capital 'O' or lowercase 'o'?
K: Capital 'O'.
A: See, capital 'O' needs to touch the top line and the bottom lines.
K: Ok, ok, let me try again.
A: Good job. You have improved! Your capital 'O' touches the top line! Can you try it again so that it can touch the bottom line?
K: Ok.
(After several times, she was impatient~~)
A: Do you want to give up?
K: Ahhhhhh
A: Do you know the rewards do not like kids easily give up doing things?
K: Really?
A: Yes, of course. Is giving up a good thing?
K: No.
A: So do you think rewards like kids doing good things or bad things?
K: Doing good things. I am not giving up. Can you help me?
A: Sure. See, capital 'O' is an oval touching both top line and bottom line. Let me show you.
(I held her hand and wrote the letter, several times.)
K: It is too long. I want to rest.
A: Shall we try three more times? Then you can rest. But you can not get the pencil because you do not know how to write capital 'O' and lowercase 'o' yet. Is it OK?
K: All right~~
(After two times, kid wrote a very small capital 'O')
A: Ok, you can rest. Let's try it tomorrow!
(second day & third day)
A: Do you remember how to write capital 'O'?
K: No.
A: Remember that is a big oval touch top & bottom lines.
K: Let me try.
(After several times, she wrote a capital 'O')
A: Great! Now you know how to write capital 'O'! Give me a big hug~~
K: Yeah~~ (hugging)
A: See, the lowercase 'o' is very similar with capital 'O'. Lowercase 'o' is just smaller, instead of touching top & bottom lines, it touches middle & bottom lines. Shall we try?
(After trying several times)
K: Is this one OK?
A: Dear, pay attention to the middle line. This 'o' does not touch the middle line.
K: Let me try again.
(After several times)
A: Yeah, this lowercase 'o' is best. Would you please write it like this?
K: Ok.
...
(After she wrote capital 'O' and lowercase 'o')
A: Good job. Could you try to write the letter without my instructions?
K: Let me try.
(After several tries with my instructions)
K: I did it! I know how to write capital 'O' and lowercase 'o' now!
A: Yeah! Here is your pencil! Do you want workbook now?
K: Yes.
A: Oh, here is the letter finding game. Could you find all the 'o's on this page?
K: Yes, I can circle them.
A: Do you want a reward sticker for this page?
K: Yes.
A: Finding the letters is not enough, here says you also need to write a capital 'O' and a lowercase 'o' on this page and trace all the 'o's. Then you can get a reward sticker.
K: All right, I will do it.
(I get commissions for purchases made through links in this post.)
The tracing book I used:
The space is big enough for young kids to write.
The workbook I used for letter games:
There are a lot of letter, number and other games in the book. With easy instructions, kids can do it by themselves. I used it a reward to kids.