To complete the loop, you must now fasten off all the stitches:
Wrap the yarn once around the first peg and lift the bottom stitch over the newly created stitch. Repeat this for the second peg.
Then fasten off the first stitch by lifting it over the peg of the second stitch. Wrap the wool yarn around this peg, again lifting the lower stitch over the upper stitch.
Now move the remaining stitch one peg further to the left so that you now have one stitch less on the embroidery ring. The two stitches to the left of this gap now form another pair to bind off: Wrap the wool yarn around the left peg, lift the bottom stitch over the top stitch and then the newly knitted stitch over the right peg. Again, knit both stitches together, wrap a safety loop, lift the bottom stitch back over the top stitch and move this last stitch worked one peg to the left.
Continue in this way until you have bound off all the stitches in the embroidery ring.
Detach the last loop from the peg and pull the thread through. Sew the end thread with the needle.