I have really enjoyed following Ysolda's (week) daily blog,
most especially this one about accurate swatching for in-the-round knitting.
My technique is a little different.
Here is a generous swatch, 40 stitches equalling about 6 inches in width.
I've worked back and forth in the rib for a few rows, just for a base.
I did a little math, and estimate that one row takes about 32 inches of yarn.
I measured the relaxed yarn and made a slip knot at the 32 inch mark.
Do this straight of course, it's just circled round for a tidy picture.
Push the work back to the beginning of the right side and begin knitting with the attached, not the ball end of the measured yarn.
You can see the loop at the end shows that 32 was just a few inches too long.
If it had been a few stitches short in length, I would have just slipped them,
unworked, and added a few inches to the next measure.
Now knit across with the ball end, then repeat with a looped end.
With a flat swatch for knitting in-the-round it is important, IMHO, to use the very same needle that you will for the garment, and to make the swatch large enough so that you are only counting the inside area for information.
Whatever method you do use, the edges will most likely not read true to gauge.