I use the water soluble blue marking pen, and have always been able to get the marking out. I agree...do NOT iron over the marks.
I have done alot of hand quilting and feel strongly that my next one will be marked BEFORE sandwiching. My reasoning is that with some designs you have to be absolutely sure that everything is going to meet up as you go around.
If no stencil, but a drawing, use a light box and trace on before sandwiching. No need to spend a fortune on a light box either. Mine consists of a cardboard box, a flashlight and a piece of plexiglass on top. I may have to improve on this set up some day.
If using a stencil on each block it could be done fine after sandwiching as you go along. Good luck.
Hand quilting
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