The best way to get started making potholders is to pick up a potholder loom kit. This potholder loom kit has enough loops to make 6 potholders. A smaller version is also available that makes 2 potholders. They both come with the loom, hook, loops and instructions. They are made by Harrisville Designs, a textile company in New Hampshire. They make high quality, 100% cotton loops. The loops are all uniform in material and stretchiness.
The looms have 18 rows and 18 columns.
Start by picking the colors to use for the potholder.

Next, plan the pattern. The easiest to get started with is a checker pattern. This is where 2 colors are used and every column peg is color 1. Every row peg is color 2.

Once the colors and pattern are figured out, take each column loop and hook it onto a peg and stretch it onto the peg at the opposite end of the loom.

When the column loops are in place, the row loops can be weaved in. Start at the top row and weave the loop under and over each column loop until the end peg is reached.

The loops may need to be stretched before weaving it on the loom. For row 2, weave the loop over and under each column loop.

For row 3, weave the loop under and over each column loop.

Continue alternating under and over the column loops until the loom is filled.

Next the edges can be finished. To finish the edges, I usually start at the top left column loop. Take the hook and put it through a loop, pulling the loop onto the hook.

Take the loop to the left of the first loop and pull it onto the hook.

Now take your hand not holding the hook and pull the first loop over the top of the hook and second loop, keeping the second loop on the hook while the first loop comes off the hook and wraps the second loop.

Next, pull the hook through the loop to the left of the second loop onto the hook and off the loom.

Pull the second loop over the top of the hook and third loop, so that it comes off of the hook and wraps the third loop.

Continue working your way around the entire loom. The loop to the right of the first loop will be the hanging loop.
Work slowly and carefully on the last two sides as the loops may start to come off of the loom without the support of the other sides. This was always the toughest part with the old loops I used when I was a kid. The Harrisville loops are so much higher quality and make finishing the last sides easier.

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Harrisville Designs Potholder Supplies