The right needle is held I the same position as holding a pencil. For casting on and working the first few rows the knitted piece passes over the hand, between the thumb and the index finger. Let the thumb slide directly under the knitted piece while you still grasp the needle from below.
Holding the needle 2
The needle in your left hand is held lightly over the top, using the thumb and the index finger to control the tip of the needle.
Holding the Yarn Method 1
While you hold the yarn in your right hand, pass it under your little finger, then around same finger, over your third finger, under the centre finger and then over your index finger. Here use your index finger to pass the yarn around the tip of the needle. The yarn is circled around the little finger creates the necessary tension for knitting evenly.
Holding the Yarn Method2
Holding the yarn in the right hand, pass under the little finger, over the third finger, under centre finger and over index finger. The index finger is used to pass the yarn around the needle tip. Control the tension applied to the yarn by gripping the yarn in the crook of the little finger.
Steps in Knitting and The Basic Stitches
There are two best ways of casting on, each serving a rather different purpose. Thumb method is used whenever an extremely elastic edge is needed or when the rows have to be cast on the edge immediately so that they can be worked into a stocking stitch or garter stitch.
The second method is the cable or between the needles method. This gives a very neat as well as firm finish that is ideal for use before ribbing or any different firm stitch.
These methods commence with the slip knot and this is the starting-off Point for almost everything you do in knitting.
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(Quotation from '440 more knitting stitches's book)