There are various methods to cast on a knitting loom, the method shown here is the Crochet Cast on. The Crochet Cast on provides a nice, non-loopy edge that works well for most of the loom knitted items: like socks, scarves, blankets--or any other item that has the first row showing.
If you are knitting a hat that doesn't have a brim/cuff, this would be an option to the e-wrap cast on method.
Step 1: Forming a slip knot
With your working yarn, form a small circle--the short tail of the working yarn should be at the top.
Step 2: Move the circle over
Grab the circle and move it on top of the yarn that is coming from the ball of yarn.
Step 3: Pull the working yarn through
Insert your fingers inside the circle and grab the yarn coming from the ball of yarn.
Step 4: Pull on the yarn tails
Holding to the circle/loop formed in step 3, pull gently on the two ends of the yarn--the beginning tail and that coming from the yarn ball.
Step 5: Starting your cast on
Place slip knot on the first peg on the knitting loom.
Step 6: Insert crochet hook through slip knot
With crochet hook in hand, insert it through the slip knot on the first peg.
Step 7: Form the first chain
Hook the working yarn with crochet hook thus forming a small loop.
Step 8: Place loop on next peg
Place the loop on the next adjacent empty peg. To the left if knitting clockwise. To the right if knitting counterclockwise. Be sure to keep the working yarn towards the center of the knitting loom.
Step 9: Continue down the knitting loom
Following the Steps 6-8, continue down the knitting loom casting on the needed number of stitches.
Step 10: How it looks
You knitting loom should have 1 loop on each peg and working yarn should be on the inside of the knitting loom.
Step 11: When casting on for a flat panel
Place the loop on the crochet hook on the last peg needed for the flat panel.
Step 12: When knitting in the round:
When knitting in the round: place the loop from the crochet hook on the first peg. First peg will have two loops, all the other pegs should have 1. When you start knitting, treat the two loops on peg 1 as one loop.
Knitting loom is threaded and ready to be worked.