Cutting the edge is probably the most difficult part of making a sword (or any edged weapon). The secret is to take your time marking things out and use a sharp knife.
The first stage is to take the blade and mark a line around the centre of the blade where you want the edge to be. I find it better to mark two lines very close to each other (about 1mm apart). This leaves a very narrow flat edge on the sword which helps to prevent the latex from splitting along the edge but it undetectable on the finished sword. It also helps disguise slight deviations in the actual cutting of the edge (Fig. 11).
The next stage is to mark the lines on the sides of the blade where the edge will come to. The further these are away from the edge the steeper the angle of cut will be and the blade will look better as a result. The drawback is that a steeper cut also makes the actual cutting of the blade more difficult and slight imperfections will be more obvious.
I think a good compromise is to mark the edges of the blade 20mm in from the edge of the blank (leaving a 10mm wide gap up the centre between the two) (Fig. 12).
[This assumes the blade is 24mm think. If the blade is of a different thickness you will need to adjust the distance accordingly. As a general rule the following equation can be used (Fig. 13).]
Now take a sharp knife. Do not use the modelling knife you have been using up to this point but get a new one. Go somewhere this is well lit and take your time. Try and cut the edge in one single stroke with the knife going slowly and steadily taking your time. Whatever happens avoid using a sawing motion as this will produce a jagged edge which looks more like a saw edge than a sword edge.
Your first edge is likely to be a bit jagged. Do not be discouraged by this, cutting edges is a matter of practice as much as careful marking out. You can use fine sandpaper to try and smooth out any imperfections afterwards.
You should now have the finished blade (Fig. 14).
An alternative to cutting the edge with a knife is to use the "Ripper Method". This is a more rough and ready method than carving the blade described above.
You need an electric drill (any drill with a large enough chuck will do) and a cylindrical sanding attachment (the sort that has a sponge cylinder around whose edge you put a sandpaper belt as opposed to the circular type), a large G-clamp and a table or workbench outside or in a workshop (this gets exceedingly messy, so work in a place and in clothes you don't mind getting covered in foam dust, wearing a mask and goggles if you want to protect your eyes and lungs against said dust which gets EVERYWHERE).
Attach the drill to the edge of the table with the G-clamp so the sanding cylinder sticks over the edge and the trigger and lock button are accessible. Turn on the drill and shape the blade by holding the sword horizontally with the blade at whatever angle you want to cut it to, perpendicular to the axis of the drill and moving the blade in long, even strokes in the OPPOSITE direction to the direction of the sandpaper's motion, each stroke taking the entire length of the blade (minus the very tip). Shape each edge of each blade slowly and carefully, the sander rips through foam at a huge rate of knots and pressing too hard can be disastrous - but the strokes must be smooth and confident, as hesitating mid-stroke can also be a bad thing. When the blades are done, carefully shape the tip by lightly pressing onto the sander, always pointing the tip along the direction of motion of the sander to avoid the tip being dragged back and blunted.
This method does take a bit of practice, but, once you've got the hang of it, is MUCH quicker and easier than carving the blades, though the inside edge of the blade isn't as sharply defined. It also goes without saying that all the precautions of working with power tools should be followed - tie long hair back, don't wear loose clothes, and, most of all, since your fingers will be coming into close proximity with the sander, mind your fingers!