The Pen Tool uses a technique called curve fitting to create a smooth curve from a freehand path that is drawn by using a Touch/Drag gesture combination to drag the tool to desired points on the Drawing Canvas.
To use the tool, simply select it, and then draw a freehand path by using a Touch/Drag gesture combination to maneuver the pen. The Pen Tool converts the drawn path into a smooth curve once the drag gesture is released. The following figure illustrates what a curve looks like when drawn by hand, and then what it looks like after the Pen Tool has created the curve.
Please note that if the Curve Smoothing option is disabled in the Usability Settings, then the figure created with the Pen Tool will appear similar to what is shown below:
The Pen Tool can create shapes instead of paths by using the Function Key Feature in conjunction with the pen tool. If the function key feature is enabled when finishing the drawing of a shape (path) by releasing your finger, a closed shape will be created as opposed to an open path.