The absolute CORRECT way to fold fabric is the way that works for your storage unit and for you. Each of us do it differently and I don't think that any one way is better than any other. Sorting is a personal preference too although I think most of us do it by color, there are also other catagories as your stash enlarges. Mine is by style and color. All my 30's/40's fabrics are together then sorted by color, my childrens fabrics are together then by color, etc. If your stash is small--a bin or two, a drawer or two, then you don't really have to sort it at all unless you want to because you can pretty much see it all at once. Don't overthink it, just do what works for you to maximize your enjoyment.