Another way you can do it (which is very hard to sleep in, but worth a try if you're willing as it's much less fiddly than rag-tying), is to section off the hair into as many sections as you like (and obviously, the smaller the section, the curlier the result - approx 3-6 sections on each side of the head gives nice waves, lots and lots of little ones gives tight ringlets), twist it as tight as you can go, then starting at the scalp, wind the hair into a knot/ball type shape on top of the head. You can secure it with normal hair elastics, rags or (my personal favourite) lengths of knitting wool/twine - just wrap it around the base of the knot where the end of the hair is sitting, a few times to make sure it's secure, then leave it as long as you want. (It will look something like this, depending on the size of the sections and the thickness and length of the hair.) You can 'roll' the knot out when you're ready (as trying to find the end of the string is tricky, and it's usually wrapped over itself at least once), slide the hair tie/twine out and separate with your fingers.

HTH