The stepped method works, but I don't like the appearance. I find the seams much less noticeable when they are random. I make sure they are spaced at least a few feet apart, and I try not to have any seams in the same spot even if it is several courses up. I waste more siding, but it is a nicer appearance.
Also. adjacent pieces should overlap so the the overlapping sections will be closer to end of the wall from which you want the junction to be least visible - makes quite a bit of difference.
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