Lay your material flat. If you are using old clothes, cut the seams apart first. Pencil mark the fabric in 3/4-inch increments (the width of the strips). Cut 1/2-inch long incisions at each pencil mark and begin tearing the material lengthwise. Keep the strips less than one yard long. Fold each strip lengthwise and iron.
Take three folded strips and safety pin them together at one end. Pin this same end to a sturdy chair or couch. Braid the strips and make a 12-inch long braid. Cut two of the strips at the point where you finished braiding. Sew the ends of the two cut strips to the uncut strip. Thread your rag rug needle with the one remaining strip in the braid.
Stop and study the braid for a moment. Braids have thin gaps where the strips overlap. These gaps alternate from one side to the other. Swedish rag rugs are worked through these gaps, one side at a time, beginning with the right.
Work the rug by holding the bottom of the braid with your left hand, at the sewn edge, keeping your thumb on top. Use your right hand to pull the working strip (the strip threaded on the needle and uncut) over your thumb tightly. Still with the right hand, pull the threaded needle under the base of the braid back up to it's right side. You should see a loop on your thumb. Name this loop "L1."
Find the lowest gap where the strips overlap at the bottom right of the braid, just above your thumb. Keep L1 tight while inserting the needle into this bottom gap. Pull the needle and strip through and, again, over your thumb, creating a second loop. Pull this loop tight as you bring the needle back up to the right side of the braid like you did before. You should have two layers of the fabric strip wrapped around your thumb. Name the second loop "L2."
Insert the needle's tip through the same bottom braid gap again but without pulling the fabric strip through. With the needle's tip still inside the braid's gap, insert the tip between your thumb and L1, from bottom of your thumb to top on the fleshy part of the thumb. Carefully pull the needle and threaded strip through both the braid's gap and L1 without disturbing L2. As you pull, L1 should come off your thumb and become part of the rug's foundation. Make a mental note of L1's new position.
With the foundation stitches in place, it's time to start the basic stitch. L2 should still be on your thumb. Bring the needle and threaded strip around your thumb once more. Wrap the thumb in the strip as, again, you bring the needle back to the right side of the braid. Name the newest loop on your thumb, "L3." Hold L3 tightly and, again, pull the needle and fabric strip through the same gap at the bottom of the braid.
Insert the needle into the braid's bottom right gap again. Don't, however, pull the threaded strip through the opening. Insert the needle, still inside the braid's bottom gap into the center of L1. Insert the tip of the needle between the thumb and L2, from the bottom of the thumb's fleshy side to top. Pull the fabric strip through all three loops. Repeat this step through each of the braid's right side gaps, until reaching the top of the braid. Move your wrapped thumb up the ladder as you continue.
Add one extra basic stitch in the final, right side gap of the braid. This means repeating Steps 7 and 8. You've now worked the entire right side of the braid.
Twist the braid one time until the left side is on the right. Work two basic stitches (Steps 7 and 8) in the braid's bottom gap (formerly on the left side) and continue up the braid as before. Once the rug has reached the desired size, cut the working fabric strip and sew it to the bottom of the rug.