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In ornamental carving as a whole, and this sort of work in particular, picking the right tool is half the battle. Being able to wind it around the curve is the other.
Here's the thing: if you can do both of these things: pick the tool and wind the curve, then almost certainly you'll have no problem carving curved letters! If you are unsure about it, look at this lesson: 'Choosing Gouges for Curves': you won't really see any difference to what we are doing here.
Pay special attention to tuning the spiralling line that represents the very edge of the paper; that's what's really visible to the viewer.
