This is an easy method for drawing a general-purpose oval shape. This method requires you change your compass setting 3 times, thus, 1-2-3. If the first setting has radius 1, the second setting has radius 2, and the third setting has radius 3. The largest circle is tangent to both of the smaller circles at the same time, and so it becomes difficult to discern where the curve changes from one circle to the other (after the construction lines have been removed). We are pattern recognizing machines, and so our eyes are quickly fooled into seeing an oval, rather than seeing the intersection of four circles. A similar technique may be used to draw an egg, by changing the size of one of the two smaller circles. Based on the relative popularity of this video, I may make an egg-tutorial in the future.
By the way, this is not actually a true ellipse. If you would like to see how to make one of those, follow the link at the end of this video.