Secure your yarn on the first peg on the right of the holding peg with a slip knot, leaving a 12cm (5") tail (that will get woven in later). Bring the working yarn to the inside of the loom and wrap it around the next peg clockwise. Continue to the next peg and work around the loom counter-clockwise twice.
There should be two e-wraps on each peg now. Pull the bottom loop up and over the top loop using the little hook tool which came with the loom. Continue until you have knit over all stitches, and wrap another row. Knit this one as well, continue wrapping and knitting rows until the work has the desired size.
Tip: if you are more comfortable using your left hand, you can reverse this. In that case, you need to work around the loom clockwise by starting on the peg to the left of the holding peg and winding each peg counter-clockwise; also knit in the reverse direction.
Important: wrap loosely!!!