Summarize this article:

Knitting on your arms uses the same basic technique as knitting with needles. However, it can be more challenging at first since you will be using your fingers to create the new stitches.  To knit the first row, take the free end of the yarn (set the tail aside) and loop that yarn around your hand. Then, insert this loop into the first loop on your right arm. As you pull the loop through, slide the old loop off your right arm and slide the new loop onto your left arm.  Continue to knit the stitches in this way until you reach the end of the first row. As you knit using your arms, you will be transferring the stitches from one arm to the other. That means that if you started on your right arm, then you will be transferring the stitches over to your left arm by the end of the first row, and then back to your right arm by the end of the second row. Continue knitting until you have achieved the desired length. You will need to bind off the stitches to finish the blanket. As with knitting using needles, you will be casting off by knitting the first two loops and then pulling each loop through the one that is behind it.  For example, start by knitting the first two loops in your row. Then, stop knitting and grasp the first loop in your row with your fingers. Pull this loop up and over the second loop on your hand so that it is secured and you only have one loop on your hand. To continue casting off, follow the pattern of knitting one and looping the first loop over the second loop until you reach the end of the row. As you cast off, you should never have more than two loops on your casting off arm. After you have cast off the final loop, pull the free end of the yarn through the loop. Then, weave the tail end of the yarn through the loops on the edge of the blanket to hide it.  You can also tie the end of the yarn in a knot going through one of the stitches to secure it. Trim off any excess yarn from the tail and your blanket is complete!

Summary:
Knit your first row. Transfer the stitches back to the right arm for your second row. Bind off the stitches. Weave in the ends.