Training. You must know how your enemy moves and figure out what his or her most effective moves are. It's not an active skill, it is anticipation. Anticipation of the system a character can and will use. The rhythm of their combos, attacks, and strikes used against them with a quick parry. Some moves are telegraphed and you can easily parry them before they land the hit while others will take practice and timing to figure out where they come from. Projectiles are somewhat easy to start with, then heavy attacks and some specials, but anything else is up to experience. So I implore you to train and figure out what your opponents have in their arsenals if you want to learn how to parry effectively. Train, study, and get your ass whipped to learn more: the way all of us learn to get better at fighters.

Then I guess I got work to do. Thanks for the help!

It's basically mind games. Get to know how your opponent approaches you and start to identify key components, then parry accordingly. The worst thing you can do is try to parry everything that comes your way because you're just going to eat a full combo.

Start with projectiles and work your way up as well. Going straight for the full Chun-Li parry (A.K.A. Daigo parries) is a deathwish. It's safer to just block it and punish if you can.

Then I've definitely been doing it wrong.