Summarize this article:

Before wrapping in the opposite direction, press down on the yarn between the pegs with the side of the hand. This moves the loops down on the pegs and creates room to loop the yarn around each of the pegs again. There should be some resistance when pressing down on the yarn. This  indicates good tension, which will result in a neat looking finished scarf. If the yarn feels loose or has already slid to the peg bottom on its own, then the pegs are not wrapped tightly enough. In this case, you may need to start over. Each peg (except for the last peg wrapped) will need to have two loops on it before working the loops off the loom. To make a second pass, bring the yarn down from the last peg wrapped and around it in the same direction as the yarn from the previous pass. Bring the yarn up to the next peg moving back towards the beginning of the loom. Keep wrapping the yarn around the pegs in the same direction as first round of loops until the last peg (the first peg wrapped on the first pass). Wrap this peg from the opposite direction. After wrapping the last peg, hold the yarn in place with fingers or wrap it around the anchor peg on this side of the loom. When each peg in the row is wrapped twice (except for last peg on upper end of the loom) begin working the bottom row of loops off the loom. Insert loom tool through the bottom loop on the last peg in lower row. Bring the loop up and over the other loop on the peg to knit it.  After knitting the first loop on the lower row, repeat for the bottom loop on the upper row. Return to the lower row going back and forth to knit the loops until the end of the row. When finished working the first round of loops off the loom, only one stitch is on each of the pegs. Continue the process of wrapping the yarn around the pegs and working back and forth across rows to knit the loops. Continue until scarf is the length desired.  After a few rows, knit material comes through the bottom of the loom. Measure the knitted material to determine where the scarf will end. Four rows creates 1” (2.5 cm) of knit material. For a scarf five feet long or 60” (152 cm), knit about 240 rows on the loom.

Summary:
Press down on the stitches. Wrap the yarn around the stitches again. Loop last peg in the opposite direction. Use loom tool to lift bottom loops over top loops. Repeat process to the desired length.