Step 1: 1.) Cutting
Step 2: 2.) Twisting
Examine any twisted rope. You will see that it is made up of smaller twisted pieces. When the smaller lengths are twisted, they will want to wrap around each other (think yoyo string). If you want to learn more http://en.wikipedia.org/wiki/Rope#Laid_or_twisted_rope
Hold the two lengths of cotton, one in each hand, about 6 inches from the start knot. Twist each length counter clockwise (from your perspective). It should only take a few turns for the pieces to look "round". Now, exchange the pieces you have in your right and left hands. Pass the LEFT hand length OVER there Right hand length. Twist each length a little more, and repeat.
Make sure you stay relatively close to the "twisting point, where the two lengths become intertwined. Otherwise, the rope will not twist "tightly". While twisting, the ends will want to twist themselves. Occasionally run one hand back to undo them.
If you get tired, you can tie onto a chair. Just make sure you keep the tension on the twist.
The rope may be twisted in the opposite direction.
When you get to the end, tie a knot to prevent it from undoing itself.
I hope you enjoyed reading this instructable. If anything is unclear, or you have input on how it could be improved, please comment.