I have seen a number of knitted fringe instructions in old books, and finally decided to give one a try. At first, I couldn't imagine how this would work out, but of course it does! It's a little bit of knitted magic.
You can use any yarn and needles you like.
Cast on 8
*K2, YO, K2tog*
Just repeat this for every row, until the fringe is as long as you like. Then, bind off five stitches. Cut the yarn and pull the tail through. You will have some stitches just hanging around on the left needle - these will turn into the fringe. Slide the remaining stitches off the needle, and unravel them.
You can then attach your fringe to knitted or crochet items. You can sew the fringe on with a tapestry needle, or attach it with a crochet hook and single crochets. I attach mine with a crochet hook in the video below. You can hold your fringe and the item you are attaching it to with right sides together, so the crochet seam is on the back, or you can hold them wrong sides together, and the seam can be used as a decorative element.
I suppose you could even make the fringe on some fine crochet cotton, and sew it on with a regular needle and thread. I think this would look so pretty as a decoration on a pillowcase, or maybe some nice dinner napkins.