Edit in JSFiddle

// grab the canvas element, get the context for API access and 
// preset some variables
var canvas = document.querySelector( 'canvas' ),
    c = canvas.getContext( '2d' ),
    mouseX = 0,
    mouseY = 0,
    width = 300,
    height = 300,
    colour = 'hotpink',
    mousedown = false;

// resize the canvas
canvas.width = width;
canvas.height = height;

function draw() {
  if (mousedown) {
    // set the colour
    c.fillStyle = colour; 
    // start a path and paint a circle of 20 pixels at the mouse position
    c.beginPath();
    c.arc( mouseX, mouseY, 10 , 0, Math.PI*2, true );
    c.closePath();
    c.fill();
  }
}

// get the mouse position on the canvas (some browser trickery involved)
canvas.addEventListener( 'mousemove', function( event ) {
  if( event.offsetX ){
    mouseX = event.offsetX;
    mouseY = event.offsetY;
  } else {
    mouseX = event.pageX - event.target.offsetLeft;
    mouseY = event.pageY - event.target.offsetTop;
  }
  // call the draw function
  draw();
}, false );

canvas.addEventListener( 'mousedown', function( event ) {
    mousedown = true;
}, false );
canvas.addEventListener( 'mouseup', function( event ) {
    mousedown = false;
}, false );

var link = document.createElement('a');
    link.innerHTML = 'download image';
link.addEventListener('click', function(ev) {
    link.href = canvas.toDataURL();
    link.download = "mypainting.png";
}, false);
document.body.appendChild(link);