Concept to Completion

Find a suitable image (or draw one) that you want to carve. The level of detail you can achieve will be controlled not only by your skill but by the wood used. Hard woods like oak take detail better but are much tougher to carve. 

Copy the image outline using carbon paper or a similar method to a pre-sanded piece of wood. At this stage the detail can be kept simple and only the main shapes defined. From this you can work out the levels (layers) of the carving. Try to use a maximum of 5 levels, 1 being the closest to the front and 5 being the background.

For example in this image the sword, hands and cross are all to the front (1) going back to the body (2), shield (3) and Background (4).

Begin by removing the lowest layer of the carving. This should not be more than 3/4 of the total depth of the wood. A proper depth gauge can be a god send and cost very little, if not a home made version could be made. Make the background as smooth as possible with chisels as this will save time during the finishing stages. 

Roughly sand the background, don't spend too much time on this as it will be done more completely later. Redraw (using the carbon paper) all the main detail on the carving, the different levels can then be numbered and cut out in the same way as the background.  Do not worry too much about detail as this will be completed later, it is much more important to get the levels right.

Once the basic levels are established you now need to carefully go back over the carving smoothing curves, defining the corners and filling in the details of the carving. The very tip of a carving knife or micro chisels will probably be needed as well as various grits of glass paper.

Once all the details have been added and the textures perfected for the armour etc the sanding can commence. This should always be with the grain of the wood and progress from a course grit (60) to a medium (300) and a final finish with super fine (1200) grit paper. At this point you need to decide what type of finish you want, paints, oil, stains or just plain. In this instance I have opted for a fully painted figure and cross and plain background. the whole carving has then been finished with danish oil. All that's needed now is a hook and et voilà another carving done.