I'll try and give you a little detail on clay coating a blade.
The "clay" is refractory clay. The most common type used is called satanite. It is available from many knife suppliers, refractory suppliers, and from my favirote source -Darren Ellis -
http://forgegallery.elliscustomknifeworks.com/
It is the same thing you use to line your forge with.
Other thing people use are APG-36, fire brick mortar, stove cement, and several other refractory coating clays.
The hamon on the blade will roughly follow the clay edge. It may be 1/16-1/8" above or below the clay, so it will take a little practice to figure out where it will fall. It is unpredictable often.
Start with a blade ready for the quench. It should be sanded to about 220 grit. Remember, any deep scratches will be a lot harder to remove after hardening, so get them all out now.
OK,clean the blade well with any solvent to remove oils and gunk from the grinder belts. Then wash the blade in soap and water and dry with a clean paper towel. Mix up some satanite to the consistency of cream. Apply a wash coating of this to the entire blade. Let it dry ( a hair dryer will help speed this up).This make a thin base coat that helps hold the thicker layer on the spine, and helps decrease de-carb.
Now, add some more satanite to the bowl to make it about as thick as a milk shake. Using a Popsicle stick, apply the "clay" to the areas you wish to delay the quench. Use your fingertip to make a smooth edge to the coating. The layer should be about 1/8" thick. Try and make both sides about even as far as the wavy pattern goes. I use my thumb on one side, and my fore finger on the other side (at the same time) to assure the clay edge is the same. The clay edge should be about 1/2 to 3/4" from the blade edge. It should be a slow undulating wave for your first dozen blades. Fancy patterns are for when you have the clay quench down pat. After all is smooth and even, let it dry ( use the hair dryer again if you want to speed things up).
Ashi lines - Ashi are those wispy lines going from the edge into the hamon like smoke and mist. They are caused by applying a thin line of clay from the clay edge on the blade side , to the blade edge. Use the popsicle stick and some of the clay mix that has been thinned a little. Touch just the side of the stick to the clay, and touch the side to the blade . Lift the stick straight up, leaving behind a little ridge of clay from the edge of the blade to the clay coating you already applied. These ridges should be about 1/16" tall. There are many ways to set the ashi, but the simplest to start with is to make "X" shapes all the way along the edge from tip to ricasso. The "X" should be about 3/8 to 1/2" wide at the edge and where it meets the clay coated side. When the ashi are all on the blade let it dry overnight.
Take the coated blade and bring it up to austenitization temp. For a clayed blade, you have to allow enough hold time to let the entire blade come up to temperature. I soak the blade at temperature for 5-10 minutes. Use a slightly lower austenitization temp than you would for a fully hardened blade. If you are using 1095, do it at 1425-1450F instead of 1475F. When all is ready ,quench in fast oil, brine, or water. Water or brine will make a bolder hamon, but blade cracking and breaking are more likely.Oil is safer. You need a fast quenchant, so this is not the place for old motor oil, ATF, or other alternate quenchants.
When the blade is ready for the quench, take it from the oven or forge , and quench it in one straight smooth plunge. Count 1-2-3 and pull it out of the quench. Be prepared for it to burst into flames ( this is not an indoor quench technique, BTW). Don't worry about the flames and smoke, just count again...1-2-3.... and stick it right back into the quench tank. The flames will go out in a few moments, or you can put the lid on the quench tank ( you should have a snug lid for any quench tank). After the blade has cooled for a minute or two, take it out and gently scrape off any remaining clay. Sometimes it all falls of in the tank, and sometimes it nearly all stays on the blade. DON'T whack the blade hard to knock the clay off, as this may easily break the untempered blade. Wipe off the boil, wash the blade, and scrub off any remaining clay with a scrubbie. The line you see is not the hamon, but the etch line from the clay.It will be sanded away in finishing , and the real hamon will be seen. Check the edge with a file to make sure it got hard.
Temper the blade ,twice, at 375-400F, or your preferred temperature. Sand the blade to 400 grit and give it a quick dip in the Ferric Chloride tank.Rinse well. This will show where the hamon is, and what it will look like. If all looks good, proceed with the sanding and finishing. If the hamon is too high, too low, not there, or something else is wrong, normalize the blade, re-clay it, and re-do the quench. Sometimes it takes three or four tries to get it right.
Once you get the blade finished to about 1000-2000 grit, start the etching for the hamon. Use a very dilute FC solution ( from 10:1 to 50:1), lemon juice, vinegar, etc. Rub/wipe it on and wait a few seconds to a few minutes, watching the hamon develop. Rinse and lightly sand the blade over and over again ( sometimes using the next grade higher paper helps (2500 grit, for example) until the hamon looks right. Rinse the blade well and wipe down with windex ,TSP, or baking soda ( depending on what etchant you used). Now dry the blade and use Flitz to bring up the color of the blade. Don't just rub it everywhere, but follow the hamon to brighten the blade between the edge and the hamon. Go up the blade bevels as much as needed to get the color blend you like. You can use red rouge to get a darker look from the hard edge by carefully hand polishing it with a paste of a little rouge and a drop or two of clove oil. There are many other techniques to finish the hamon.
The finishing and etching to produce the full hamon, with all its depth and mysteries is a technique that can take a long time to master. Read up on hybrid polishing and the many BF threads on hamon finishing to get more info. Setsuo Takaiwa's book on "Japanese Sword Polishing" is a must have if you want to get serious about hamons and blade polishing.
Walter Sorrels has a great DVD on hamons. It is worth every cent. I recommend anyone who is interested in hamons, especially on swords, to get his whole set of DVDs.
Hope this helps,
Stacy