Step 3: Annealing and rough grinding
When we anneal a piece of steel, we're basically making it softer to make it easier to work with and take less of a toll on our tools.
The easiest way to do this is in a small forge. Heat up the metal until it gets an orange glow, then shut off and close the forge, letting it cool down slowly. Alternatively you can use a torch to heat it then stick it in some sand, or put it in a small fire to heat it up and leave it in there, letting the fire die down slowly. Essentially we want to get it really hot, then cool it down slowly.
Once your steel is cooled down and is now softer and easier to work with you can start grinding out the shape of your knife. For this you can use an angle grinder, bench grinder, belt grinder or files. Grind until the workpiece is smooth and you've almost reached the outline.
Now using the same tools, you can start grinding the bevel (removing metal to make the blade). It's worth noting here about handedness. A "right handed" kiridashi has the ground surface facing away from the user when held in the right hand, and a "left handed" kiridashi has the ground bevel facing away from the user when held in the left hand. A kiridashi is traditionally only ground on one side, the other side being left flat like a woodworking chisel. If you desire you could also make the grinds even on both sides like a more conventional knife.
A kiridashi being left or right handed doesn't mean it can only be used by a person who is left or right handed, respectively. They'll simply work better in different situations; some people will even own a set consisting of a left and right handed kiridashi. If you're only making one, then go for one that matches your handedness, or one with even grinds (a chisel ground knife makes a better woodworking tool though)
Do not completely finish grinding the bevel by this method, especially if you're using a tool with a hard grinding surface- this is liable to leave deep gouges that you will never get out of your knife.