You can stitch letters by hand with the embroidering stitch technique called the backstitch. A backstitch is pretty much what it sounds like it is, you bring the thread back behind the first part of the stitch to create it. After the letter template is transferred to the fabric, you can backstitch the thread along the lines of the design. You can hand stitch letters to make monogrammed towels and handkerchiefs, or you can hand stitch entire words onto pillows, decorative rugs and articles of clothing.
Begin transferring the embroidered letter design by pinning the transfer paper onto your fabric. Make tacking stitches with white cotton over the design by inserting the needle through the transfer paper and the fabric in small regular running stitches or basting. Tear off the transfer paper once you are done.
Tie a knot at the end of the two-strands cotton thread. Insert the needle into the top side of the fabric and pull it through to the back, 1.2 cm (1/2 inch) away from the start of the letter. Insert the needle up through the fabric near the knot and pull the thread through to make the first thread insertion point of the backstitch. Insert the needle partway back behind the knot, so that the tip is sticking out of the fabric, but don't pull it through. Manoeuvre the needle tip to 1.2 cm (1/2 inch) away from the first thread insertion point. Insert the tip of the needle through the fabric and pull the thread through to complete a backstitch.
Back-stitch across the fabric from the knot to the starting point of the letter. Insert the needle into the centre of the thread where it is backstitched on the top of the fabric and pull it through, applying enough tension or pressure on the thread to sink the stitch into the fabric. Repeat this three times to anchor the thread into the fabric. Pick up the knot and thread tail with tweezers. Cut the knot off right above the fabric with scissors.
Start by embroidering the base of bottom of the first letter and stitching your way up it. When you reach intersections in the letters, start and stop the stitching in sections to keep the amount of thread that it stretched across the back of the fabric to a minimum. Back-stitch across the stretched thread to the starting point and then wrap the thread around the back of the stitches with a whip stitch.
Move from stitching one letter to another intersecting letter by whip stitching along the back of the stitches to where the letters intersect, then backstitch the top of the letters before moving down to the rest of the letter. When you reach a separate letter, end the thread you are working with, and then start another one as you did previously.
To make the letters look neat and uniform, stitch small, even spaced backstitches with the thread. Remove the tacking stitches as you work past them.