I tried using the Toggle mark occurrences (Alt + Shift + O) button and also in Preferences -> General -> Editors -> Text Editor -> Annotations
Preferences --> Java --> Editor --> Mark Occurrences
Find the Preferences under Window,
In General > Editors > Text Editors > Annotations(1)
(5) is to select the color and press apply.

If you go into the window-prefrences, select the language you want/are working with. Select the editor under this specific language and then there is a mark occurrences there that has some options. Where it says keep marks when the selection changes, for me this was checked. When I unchecked it the system started highlighting correctly.
For folks who are using a dark background with light font colors, you may want to check out the highlight color in Preferences -> General -> Editors -> Text Editor -> Annotations. Mine was defaulted to black, which does not stand out on a black background.
For Eclipse Mars:
Window --> Preferences --> Check (Mark occurrences of the selected element in the current file.)
As shown if figure:
preferences.preferences, select C/C++ Occurrences (it will be language specific) and select Include in next/previous navigation with Text as Highlighted.This should enable the feature of highlighting all occurences of the selected word in the opened file.