I have tried a number of different polishing techniques to put a mirror shine on the toe of a shoe and as has been stated before, shoe polishing is more of an art than a science. It is actually more about feel and technique than anything else.
There are a few basics however: 1) Only use a little water at a time, 2) Only use a little polish at a time, and 3) Get a feel for the smoothness of the wax as you polish.
To that end, when using a cotton cloth, I use what I refer to as the Two Finger Technique (I’m probably not the first, or the only person, to use this technique however):
1) I wrap a cotton cloth (old t-shirt) around my first two fingers.
2) I get the tips of both fingers wet through the cloth (I use a spray bottle on mist, but tapping in a tin of water would also work).
3) I lightly rub the middle finger in the polish I am going to use, just enough to cover the tip of the finger.
4) I begin to rub the polish onto the toe of the shoe with just the middle finger (index finger slightly raised and pressed against the middle finger for support).
5) If I need to add a little more water to really smooth out the coat before the next one, I simply lower the index finger and rub the polish with that finger for a few seconds. If polish is transferred from the shoe back to the cloth covering the index finger then you used it too soon.
6) As I need more polish, I simply rub the middle finger lightly in the tin of polish again.
7) As the cloth dries out I spray (or tap) a little water onto the cloth covering the fingers.
This technique allows me more control over the amount of water and polish I use, as well as giving me a good feel for the smoothness of the wax.
I normally only use neutral paste polish (over a good color cream coat) when creating a mirror shine. I used color in the picture so that the amount of polish could be seen.