We did this to decorate t-shirts with my daughter's Girl Scout troop using pictures from coloring books, and this is what we learned.
When tracing your design or coloring, place your fabric on a sheet of fine grit sandpaper, which stabilizes the fabric. Use a Sharpie for nice crisp lines. Press down HARD with the crayons. Remember that the color will only be as intense as the amount of crayon that is on your fabric. You can use any type of wax-based crayons.
You can use any kind of paper to absorb the wax, just make sure that whatever touches your fabric is plain (if you work in an office, copy paper that is clean on one side works great). Brown paper sacks and brown wrapping paper work well, too. Freezer paper does not. If you use newspaper, cover it with plain paper so the ink is not transferred to the fabric. PRESS, do not iron. And press until you are sure that all the wax has melted off, which may mean changing the paper underneath. Do not use steam.