From this site http://www.ramsays-online.com/treadonline/chainwax.html
Unfortunately for the chains of the world, many people still subject the precision parts contained within to a daily bath of 10W-30. Motor oil is of course a lubricant, but it is intended to run through a closed system with a filter to remove suspended particulates. Dribbling it on a chain attracts dirt like a magnet. This dirt then acts like sand paper, but much more effective. With the oil to help it along, the dirt can work it's way into every bearing surface and cause significant damage.
There are many liquid lubricants on the market that are made specifically for bicycle chains, but almost all of them attract dirt to some degree. Chain wax does not attract dirt because it is a solid.
Ok, enough with the wax advocacy, let's get down to business. The first thing we have to do is get the wax. There are a few commercially available wax systems. Most of them are some mix of paraffin wax and Teflon or PTFE in a metal tin.
I prefer to make my own. Get an apple juice can, empty is less messy, and cut the top two thirds off. Put a couple of blocks of parrafin in the can, available at any store that sells home preserve supplies, or use ski wax. Then get yourself some type of engine treatment with Teflon. I use T-Plus, but any of those "add this to your oil and you won't need oil anymore" products you see on late night infomercials should do, as long as they contain Teflon. Add 2 table spoons or so to the wax.
To heat the mixture, DO NOT place is directly on a stove or burner. You just put paraffin and motor oil in a can, THINK MAN!!! :) To safely heat this mixture, get a pan that is large enough for the can to sit in. Put an inch or two of water in the pan and place the can in the center. Now the wax will not exceed 100°C unless the water boils off. Place this on your heat source, using just enough heat to start the water boiling and then turn it down a bit. After the wax has completely mixed with the oil, take it off the burner and let it solidify.
There should be enough wax in the can to completely cover a chain that is folded over on itself, about 1 1/2 - 2". Add more wax if needed, don't worry if there is too much, any overflow will go harmlessly into the water. When the wax is hard, rub your finger on the surface, it should feel greasy. If it doesn't, add a little more of the engine treatment.
Next we have to remove the chain. This is the main gripe most people have with chain waxing. For those that have always done their clean and lube job on the bike, and never had cause to remove the chain, it's easier than you think. You will need a special tool to do this properly though, the upside is, it's cheap and it's a tool that every cyclist should have. It's called, oddly enough, a "chain tool", consisting of a punch mechanism that pushes the pin through the link and a handle to hold on too. Looking at the tool, how to use it is pretty self evident, they usually come with instructions for those who don't embrace obvious quite so easily. Use it to "break" the chain, keeping in mind that Hyperglide chains require replacement pins to reassemble them (I never use the pins and my chain works fine, but I have to say that).
Cleaning the chain is not necessary before waxing. However, if this is the first time waxing a chain that has been previously treated with oil, it should be cleaned with some solvent. This will prevent your wax from getting contaminated too quickly. The next time you wax, the dirt will be forced out by the hot wax and settle to the bottom of the can.
The best way to roll up the chain is to stretch it out on a table and roll the ends toward each other. When the two circular rolls meet, slide one over the other and you'll have a circular shape that should fit into the can. You can tie the bundle with a piece of wire, leaving enough sticking out of the top to retrieve the chain from the hot wax.
Put the chain bundle on top of the wax and set it into the pan of water again and bring the water to a boil. DO NOT leave the wax unattended. Once the wax has completely melted, stir or shake the chain occasionally to get the wax between all of the parts and remove remaining dirt. Let it cook for at least 15 minutes, the metal has to reach the same temperature as the wax for the wax to bond.
Remove the chain from the wax with a pair of plyers, and take off the wire if you can. Be careful, it's HOT! Hang the chain above a plastic bag or outside, wax will be dripping until it solidifies. Some people wipe the excess wax off, it will fall off when you use the chain anyway.
Now that the chain has cooled, put it back on the bike by threading it through the deraileurs and around the crank and cogs. Take care to thread the chain through the cage of the rear deraileur properly, it can be quite frustrating to find that you've put it on the outside of the little retaining tab between the two pulleys when you try to pedal.
Wax may build up on the cogs, deraileurs, and/or chainrings. This is especially true if you do alot of dry road riding. Wipe this excess off to prevent contamination of the chain, hot water will usually remove it quite easily.
When it's time to rewax your chain, it will squeak ever so slightly. Be sure to wax soon after this telltale sign apears or you may cause excess wear. I find it best to have two chains, one can always be kept waxed and ready to go. This has the added advantage of prolonging the life of the two chains and there for the cogs and chain rings.
Some people still insist on cleaning their chain with solvent before waxing. This will prolong the life of your wax, but then again, how much does a little wax cost compared to solvent? Cleaning by hot wax is very effective. To illustrate this, clean your chain with solvent until you are satisfied it is as clean as can be. Place it in a can of clear paraffin (no engine treatment) and heat it. When the wax solidifies, you are bound to find more dirt at the bottom of the cake, forced out by the heat and carried off by the wax.
After a few waxings, alot of dirt and possibly some moisture may collect at the bottom of the can. Turn the can upside down and pop the cake of wax out. Use a scraper to remove all the soiled wax from the underside until only clean wax remains. If there is moisture in the can, dry it, if any rust has formed, remove it with steel wool or sandpaper and rinse. Put the cake back in the can for later use, if needed, add more wax and engine treatment.
Well that's it, I think you'll find if this is done consistently and properly, your chain will last much longer and it will feel much smoother through the pedal stroke. If you have any questions on this technique, don't hesitate to mail treadonline@ramsays-online.com .