Bring the yarn back and forth across the top of the hat, forming equal size loops.
When you have as many loops as you want, tightly wrap the remainder of the tail around the base of the loops a few times.
Bring the needle up through the center of the tassel.
Trim the tassel to whatever length you want.
Et voila!
Decrease Round: (With Color A) *K3, k2tog, repeat from * to end of round. (112 st)
Knit 1 round.
Decrease Round: *K2, k2tog, repeat from * to end of round. (84 st)
Knit 1 round.
Decrease Round: *K1, k2tog, repeat from * to end of round. (56 st)
Knit 1 round.
Decrease Round: *K2tog, repeat from * to end of round. (28 st) (You can switch to double pointed needles for this round, although I managed to awkwardly knit this round with the 16" circular.)
Knit 1 round.
Cut Color B's tail, and thread it through the remaining 28 stitches. Pull tight and bring the tail to the inside and weave it in. Leave Color A coming out the top of the hat.
When switching colors, first make sure that the last stitch knit in that color (2 rounds ago in this case) is not too loose or too tight.
Now bring the old color (blue) over to the left, keeping it above the new color (white). When you knit the first stitch with the new color, the old color will be trapped between the working yarn and the knitting.
If you're an English style knitter (you hold the working yarn in your right hand):
When you knit the first stitch of the round, bring the yarn over your left index finger (this creates a little slack in the yarn to prevent puckering).
If you're a Continental style knitter (you hold the working yarn in your left hand):
When you knit the first stitch of the round, bring the yarn over your right index finger.
Remove your finger for the next stitch...
If you are using slippery yarn, like this silk alpaca blend, knit the next two stitches normally, but on the third stitch give a gentle extra tug so that the first stitch of the round won't be loose.
Here's what carrying the yarns up the back looks like:
And here's what it looks like in the front:
Notice how the stripes don't exactly meet at the end of the round. Don't worry, that's normal. It's because knitting in the round is actually knitting a spiral. So, the end of a round is one row higher than the beginning of the same round! When you block the knitting, sometimes you can kind of tug the stripes into alignment.
6 1/4 stitches = 1 inch in stockinette stitch with a US #5 needle
Fits medium size woman's head.
With a US #4 needle and Color A, cast on 112 stitches. Join for working in the round, being careful to not twist your stitches.
Round 1: *K2, P2, repeat from * to end of round.
Repeat Round 1 until piece measures 2 inches from the beginning.
Change to US #5 needle and Color B.
Round 1: *K4, m1, repeat from * to end of round. (140 stitches)
Round 2: With Color B, knit to end of round.
Round 3: With Color A, knit to end of round.
Round 4: With Color A, knit to end of round.
Round 5: With Color B, knit to end of round.
Repeat Rounds 2-5 until piece measures 7 1/4 inches from the beginning (end with the second round of Color B).
