The Nail Knot was good practice for learning how to tie the more difficult Nail Knot. The Needle Knot is tied the same way as the Nail Knot except the leader is threaded through the fly line.
To begin with, take a needle and stick it into the middle of the end of the fly line. Push it in ¼ to ½ inch and force it through the side of the fly line.
Pull all but the last 9 inches of the leader through. This last nine inches is what you will use to tie the needle knot around the fly line just above where the leader comes out of the hole in the side of the fly line.
Procure a small tube. The one you used for the Nail Knot will work just find. In fact, you may want to keep this small tube around for tying future knots. Place the tube alongside the leader and fly line.
About ¾ an inch above the hole, start wrapping the leader back on itself and around the fly line toward the hole.
After 6 or 7 wraps, maintain pressure on the wraps with one hand and thread the leader through the tube.
Pull the tube out. Carefully tighten the knot trying to keep the wraps from overlapping one another.
You want this knot to be as slim and smooth as possible so it will easily slip through the guides.
Trim the tag end as close as possible.
If you want, you can apply fly tying head cement to the knot. If you do, make sure you place some glue over the holes you made with the needle, one at the very end of the line and one at the start of the knot. This will help keep the water from wicking into the line making it more difficult to stay afloat.