This binding technique is in Keith Smith's book Volume I Non-Adhesive Binding: Books Without Paste or Glue...I'm giving credit where credit is due. This is a book that is completely glueless and you need paper for the pages, a cover (paper, cardboard, etc.), and string for the binding, I use waxed linen. Also a ruler, X-acto knife, bone folder, and large needle (pointy is better for poking the holes) are helpful tools.
This is the finished look of the binding...just so you know what you are getting into.

You start with signatures of your paper, any size you want but they must be folded in half, along with your cover paper cut to size, it should be the same height as your filler paper because of the way the string wraps around the top and bottom. The cover paper should be as long as your pages and the width of the spine, I have made this cover longer so that it folds in and makes the cover stonger, also I added a decorative piece to go around the middle.

You need to measure how thick your signatures will make the spine

and then mark it on the cover paper, I have also scored with a bone folder where I am going to make the folds around the pages.

Next you mark where to cut for the hole, it should be about 1/3 of the spine.

Use an X-acto knife to cut the hole making sure to leave the paper to make flaps (this will make it stronger)

Do the same with your decorative paper.

I have cut the holes larger for more interesting detail.

Fold your cover and place your signatures inside, make sure everything fits and mark where the hole is on the folded edges of the signatures.

Take the signatures out and mark the spots on a scrap piece of paper that is folded and the same height as your book paper, you will use this as a guide to punch needle holes in the folds of the signatures.

Once you have punched all the holes you are ready to start tying the signatures in

you start with a length of waxed linen (I'm sure other string would work but I prefer waxed linen), tie a knot in the end that won't pull through the hole.
Put the needle through the hole from the inside of the signature and through the hole in the cover,

on this first one you will then loop over and go back through the SAME hole

then to tie the knot send the needle through between the string and the book going toward the LEFT.

You have made a loop to the right of your string, send your needle through this loop coming from the RIGHT and going toward the LEFT again, pull tight but not so tight you tear the paper.

Bring your string through the inside of the next signature so that you are pulling the needle through the outside and repeat the knot until you reach the last one. On the last signature tie the knot and go back through the SAME hole to the inside, if you have enough string left you can then go through the other second hole and start binding on the other end or you can tie it off so the string doesn't back through the hole.

You repeat the process on the other end, except that the knot is backward, you put your needle between the binding string and the book going from LEFT to right

Then you send your needle through the loop from LEFT to right and pull tight.

Repeat until you run out of signatures and tie off the end.
If you have done a decorative strip and it is too short like mine

here is how I made sure it would stay in place without any glue
Trace around the corners after you have lined it up in the place you want it

Cut along the diagonals (if the cover is folded, unfold first so you don't cut through both layers...I have almost made this mistake being excited to be finished)
And tuck the corners in.


And there it is, finished! You can do lots of different covers, even hard backed covers, put in pockets, use different papers, anything you want.
If anything is confusing, let me know and I will try to clear it up!