Picture of Cobra Braid Keychain with Diamond Knot
A decorative, 3" (not including the keyring) keychain made of paracord. I made a multicolored for this instructable, but there are also directions for single-colored. 
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Step 1: Materials

Picture of Materials
For this project, you will need:

2 strings of paracord that are 17" each (in different colors)
1 sting of paracord that is 14"

(Single color)
1 string of paracord 34"
1 string of paracord 14"

Key ring
yardstick or tape measure
clear tape
needle-nosed pliers

Step 2: Step 1

Picture of Step 1
Put the key ring in the middle of the short (14") strand and tape the string to keep it in place. We'll call this string the main string.

Step 3: Step 2

Picture of Step 2
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If you're not making a multicolored keychain, skip this step.

If you've made multicolored bracelets/keychains/etc. before, and you have a way that you prefer, then knock yourself out. But here's what I do.

Take one of the 17" strings of paracord and melt only one end. On the other string, melt both ends, and on one of those ends, use your pliers immediately after melting (it hardens fast) to make the end small. If you mess up, just melt it again. Now, take about an inch of the white inner stings out of the end that you didn't melt, and cut them. Then, grab the string for the end thats melted and work your way down to the other end to pull the remainder of the white strings back into the string. Insert the small end of the other sting into the open string and melt the connection. **Note: If the open string is frayed to where the other string falls out, trim the frayed part off.** 
Thanks for sharing your comprehensive step-by-step guide. At first look, I thought it must be really difficult to tie a diamond knot. However, after viewing your guidelines, it looks rather simple. I think I will try using one color first. If my first attempt is successful, then I will proceed with dual colored threads.