Okay, so you've cast on, and I know you're casting on a swatch. Congratulations on your wise choice. Now, there are a few simple rules for all stranded (not intarsia, slip stitch or two strands held together) colorwork no matter what style you're going to use: keep both yarns working with even tension, tack as you go, and bring the "new" yarn from underneath. Let's take 'em one at a time.
1. Keep both yarns working with even tension. Some folks have a tendency to knit much tighter when they do colorwork. Maybe they're trying to make sure there aren't any gaps between colors, but trust me, it doesn't work that way. When you knit colorwork tightly, you end up with a strange, ripply, bumpy fabric that won't smooth out for anything.
When it is time to introduce the second yarn, pick it up and knit as if you were using the first yarn. That is, don't change anything except colors! Really. The best practice for this is two knit two stitches with color A, and two stitches with color B for several rows until you don't have to think much about it. Then, move on.
This brings us to the next tip: (You'll need a colorwork pattern for this one)
|Floats on the back of fabric|
I know, that sounds like a lot, but it's not. It just takes practice. It's a bit like tying your shoes. It takes a little while to get it, but once you have it, it becomes easy and second nature, and honestly, you can do it.
|Colorwork front of fabric|
I suggest you knit several rows this way without adding rule #3, just letting your hands become accustomed to these two skills. Once you're really comfortable, go on to #3.
3. Bring the new color up from underneath. The trick of that is to bring it up from underneath the original color every single time you change colors. This means the original color is always going to come in from over the new color. This, along with the tacking twist reversals, does a pretty good job of keeping the yarns from getting very twisted together.
What about the loose yarn ends? You'll weave them in, just as you would any other end. If you don't want the ends to show through to the front, make sure to weave them into their own colors. In the mittens above, green was woven into green, and brown was woven into brown.
Play with this swatch until you're happy with the work you're doing. If you learn as you make a garment, often your work at the end of the garment will look quite different from the work you did in the beginning! And, as you become more comfortable with colorwork your gauge will change. That's all for now!