First, you want to roll out the clay.  Then you need  a cookie cutter or two to cut out the design of the ornaments.

Step 1

Step 2

Let them air dry.  If you want to create ornaments with holes, let them dry leather hard and then use a drill bit to make the holes. If you want to stamp a design, so it when the clay is soft.

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Once they are dry, sand down the edges, and use twine or wire to hang them!