Don't fight him. Just laugh at him and make fun of him for wanting to fight someone smaller than him. Who cares what other people think? As soon as you get out of school they're all going to be garbage collectors, drug addicts or checkout operators anyway. And so will you if you're the kind of person who needs to fight anyone who picks one.
People like him are big pussies who only pick on kids because they think everyone will back them up and they'll be popular. And because they know they can win against someone younger. If you can psycho-analyse him, you can use that against him. Maybe he has some learning disability? He wets his bed, you saw him shopping for underwear with his mum etc. Do impressions of The Incredible Hulk or a Gorilla, and expose him for the retarded kid with anger issues that he is.
Or you could get your friends to spread a rumour that your brother is in the Mexican Mafia or something. White kids are fucking scared of that shit. Just get one of your cousins/ brothers or something to call him saying "blah blah Pendeho.... blah blah blah Vatos Locos blah blah I kill for fun, mother fucker blah blah blah, You're going down homes!"
With that being said....
Keep your guard up, elbows in, head dipped. Don't look at his eyes, or concentrate on one area. Keep calm and think. Kind of stare through his chest. If he's throwing a punch you'll see his shoulders move first, or if he steps you'll still be able to see where he's going. Keep your mouth close and tongue safely where you can't bite it.
Don't react to every punch. Most of them are just going to be wild swings. Stand your ground and block, take a step back if you need to avoid a swing. When he goes for a big one and you see an opening, avoid, step in and unleash the fury wherever his guard is down. If he rushes you, grab him, pull him in, put your head back (so his head doesn't collide with yours) and bring up the knee into his ribs or stomach.
Don't punch him in the head. You'll hurt your hand. One of my knuckles is lower than the other ones from punching someone in the head. Use the bottom of your palm to smack him directly in the nose to make his eyes water. But I guess you won't notice the pain until the fight's over anyway.... If you're in close and you get into a grapple, try pushing his chin up. People can't control their body if they're looking up at the sky and don't have a sense of where they are. Step behind him, push your hip into his and trip him up.
Don't waste chances. Block with one hand and land a punch with the other. Kick if you know how.
If he grabs you that's good - it means his hand are occupied so he can't block. Grab his wrist so he can't turn it and twist it with both hands to turn him over and lock him up. Difficult to do if he's strong. And you don't have anywhere to go from there except keeping him prisoner while you make fun of him or breaking his elbow.
When someone grabs you with both hands on your chest your natural reaction is to step back or try to push them off. Don't. STEP INTO HIM. His elbows will bend automatically. Cup both your hands and slam them into his ears like you're playing the cymbols. The goal is to make it airtight and drive all that air into his ears. Try it on yourself lightly. It hurts huh? He won't be able to hear for a day and his senses will be stunned for a little while. After that keep one hand on his ear, and bring the other hand over so they're both on the same side. Push his head down and bring your knee up into his jaw.
Use the strong parts of your body against his weak parts. Elbows and knees are good. If he does big swings, duck and STEP IN, not away. Bring your hand up to your shoulder and drive your elbow into his ribs as you step in.
Most people just defend their head. If you know how to do a straight punch go for his solar plexus - no matter how strong you are, you can't grow muscle there. There are lots of places people can't grow muscle or fat. Think about them. If you grab someone's little finger with your hand do you think they'd be able to do anything if you wanted to snap it? But if you damage things like eyes, knees, necks you're probably going to kill him and you'll go to jail. If you kick him in the balls, it'll be funny, but people will think you're a pussy. And he'll probably want to kill you after that.
I almost forgot. If you get punched in the stomach don't tense your abs or hold your breath - that's how you get winded. Just tense a tiny little bit, but mainly just try to turn your body to the side, so the punch slides past.
Actually.... I think your best option is to go for the eye socket punch. You're probably going to lose. But no one cares about that. No one's going to remember that if he's the one walking around with a black eye. If you can manage that he's going to lose all his confidence, everyone will laugh at him and he'll probably never bother you again. Two black eyes would be sweet.
Basically dude, the fight isn't going to go anything like how you imagine it. Someone will throw a punch, you'll grab each other and end up on the ground, and you'll punch each other until the fight gets broken up. It'll probably last around 7 seconds. And if that happens DO NOT let him sit on top of you or he's going to pulverise your face. Keep him in close, reach up and grab his neck and pull him in close so he doesn't have room to take a good swing. If you can punch him in the ribs.
After the fight, depending how it turns out, you're either going to get in trouble from teachers, go to hospital, or go to juvenile detention. One idiot at school isn't worth your future. You're going to meet a whole lot more of them in your life. You can fight them all, or just step over them and watch them become drug addict garbage collectors while you do better things with your life.
I don't recommend fighting. It's totally lame and pointless. It's not like you're going to find out the meaning of life or make world peace after it's over.
But I have seen a few fights ending with the guys realising the pointlessness of it all, hugging and saying "sorry man!".
Edit: Just because this post isn't QUITE long enough. Human males don't usually actually want to fight, they just don't want to be seen as weak. Another tactic is just to give him what he wants. Just say "Yeah, you're right man, you're much bigger and tougher than me, look at me, I'm just a weak freshman, you could obviously easily beat me, so what's the point in fighting? I mean, I'm obviously going to lose.... it's up to you man, if you really want to fight me then I guess I'll just stand here while you kick my ass, cause I'm not going to fight you. It's up to you man, you can go ahead and punch me if you want, or we could just say that you're the tough one and call it a day."