Shovel Knight: Treasure Trove

First thing, you need to buy a fishing rod from the guy all the way to right in the basement of the Village (basement is underneath where they sell Health and Magic).

After that, you will need to look for sparkling areas in any level, usually between two platforms (platforms as in, if you fell between the platforms, you'd die.) Pull out the fishing rod and press X to throw it in and wait for the "!!", then press X again and you'll get a fish. There are at least two in every level I think, maybe even more.

There is one in the first level on the left of the screen when you are fighting the second dragon.