In case you missed the first part of my Stamp Carving Tutorial, here it is: Stamp Carving Tutorial: Part I.
Step 1: Either trace or draw your image with pencil. Make the pencil markings as dark as possible because this will determine how bold your transfer will be. The bolder the transfer, the better!
Step 2: Cut a block of carving material to the size of your image. Press the image to the material and rub. Try not to move the image because you want one solid transfer. If the image shifts while you're rubbing, you may end up with multiple copies of your image on the carving material, which is bad. :)
Step 3: Trace the pencil image with permanent marker. This is important because the pencil image tends to fade during the carving, so it's nice to have a permanent outline of the image on your carving material.
Step 4: Carve out everything that's not in permanent ink. I use a small carving tip, I think it's size 1, for the details and I'm currently using size 3 to remove the bigger chunks.
Step 5: During my carving process, every time I carve something out of my stamp, I ink it and make an impression. This helps me see the progress of my carving. The hardest part about stamp carving, however, is knowing when to stop. Your stamp can potentially lose an eye or mouth if you keep trying to perfect it.
Step 6: We're almost done (Part III is next, so stay tuned).
Here's my coffee cup...for now (ha ha):
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