For the purpose of this tutorial, I will use red thread on a white hankie. When doing this for real, you should always match the color of your thread to the hankie as closely as possible. Use a single thread, knotted at on end.

Wet 1/2 of a washcloth, and squeeze it out. Place it near your work area. This is going to be your finger and thumb moistener.Wet thumb and forefinger of your left hand on the washcloth (right hand, if you are a lefty). Dry on the dry part of the washcloth.

Now, put your threaded needle into the edge of the hankie, with the knot placed on the wrong side, as shown. Place your fingers as shown in the picture, but put your thumb over the knot, in the back position.

Gently 'roll' your thumb forward, catching the edge of the hankie right at the knot. This should form a 'tube' shape in that spot.

Insert your needle into the 'tube' and then down through about 2 threads on the hankie. Pull snug, and if there is still room, put in a couple more stitches. When you have sewn down all of the rolled hem available, move your thumb down about an inch, and roll again. Repeat stitching in place and rolling until you have done all the hem needed. You will need to re-wet your thumb and forefinger several times before you are finished.