I prefer to do this when her hair is damp, but if you bathe her the night before, I think it would be fine to do it dry. That would save you time on having to blow dry it, although just drying a pony is very quick. It's easier to smooth back all the hair into a pony when it is damp.
Pull all the hair into a pony tail. Remember the tuck-under knots from a few posts ago? You are going to do it on this, just pulling the hair through the opposite way, so the hair sits on top. Divide the pony with a comb, right in half.
Now that it is divided in half, pull the pony right through it.
This is what it should look like when it is all pulled through. After it is pulled through, pull the pony tight, so it is close to the base of the head & not loose at all. After you have done this, get a comb & smooth the hair everywhere so there are no bumps.
Blow dry the pony & curl the ends of it & there you have a cascading waterfall!!