From March 2014 newsletter
The Palomar knot is not as widely used as the Improved Clinch Knot, but has some advantages for tying a fly to tippet that might make you a convert.
Pros: Relatively easy to tie; Typically 90% of line strength
Cons: Requires leader to pass through the eye twice; Uses a larger amount of leader than Clinch knots
One other advantage is that it makes it less likely to drop and lose your fly while tying it on; one has a hold of the fly while threading the tippet through the eye (twice), and thereafter the loop of the tippet ‘captures’ the fly (see step 2 in the photo sequence), so that you can release it and tie the knot with little fear of the fly escaping. This has proved especially effective for me with smaller flies such as midges.
Step 1: Pass leader through hook eye
Step 2: Double back the leader through the eye
Step 3: Tie an overhand knot with the loop of leader
Step 4: Pass the fly through the leader loop
Step 5: Cinch the knot / trim tag end
Tutorials, illustrations, animations and videos of the tying sequence can be easily found online. An interesting and quite extensive test of the Palomar with a wide range of 20lb test line is reported in the article at http://www.sportfishingmag.com/techniques/rigs-and-tips/staying-power