What is a picture password and how do I use it in Windows 8?

A picture password is a new way to sign in to Window 8 operating system. The picture password comprises of two parts, one is the picture you need to set for the password, the second is the set of gestures you draw upon it.
To set a picture password, follow the steps below:

1. Move your mouse from the top or bottom-right corner of the screen, and then click on Settings charm from the Charms bar.
    
2. Click Change PC settings option located at the bottom-right of the Settings charm. PC Settings window is displayed.
    
3. From the PC Settings -> Users -> under Sign-in options, click Create a picture password button.
   
4. Enter your current text password to confirm your account.
    
5. The "Welcome to picture password" screen is displayed which explains how to set up a picture password through different gestures.
    
6. From the left pane, click on the Choose picture button. Windows displays your Pictures folder with any images. Click on the image you wish to use as your password and then click on the Open button in the lower right corner.
   Note: Depending on the size of the image, you may be able to drag it horizontally or vertically to position it. Else, click on the Use this picture button.  
    
7. In the Set up your gestures screen, create your first gesture, then your second, and then your third.
    
8. In the Confirm your gestures screen, recreate the three gestures in the same order. If you're successful, a successful notification is displayed. Else, you need to try again by clicking Start over button.
    
9. Once you’re finished, click on the Finish button.
    
10. Return to the Start screen by pressing the <windows> key on the keyboard. Click on your account name and picture in the upper-right corner and then select Lock from the menu.
     
11. To log back in, press any key to get past the lock screen. You'll then see your picture password. Draw the three gestures that you created to log in. If you've matched them closely enough, Windows then brings up your Start screen. Else, you can try again or switch back to using a text password.