It took me a good bit of time to decide if I thought it was necessary to knit swatches in the round if I was knitting an item in the round rather than flat. The practice of knitting sweaters flat in pieces that are sewn together versus knitting sweaters in the round is, in itself, a whole topic with proponents for each practice. I may take this topic up at a later time, but for now I will focus on knitting a swatch in the round.
First, there are many knitters and designers who only use gauge swatches knit flat to determine their stitch gauge even if the pattern is knit in the round, and second, most patterns do not state how the gauge swatch was done. All you see in the pattern is the gauge statement.
Do you know if your gauge is the same if you knit in the round as when you knit flat? There’s a good chance that it’s not. As I’ve said before, gauge is a measure of how an individual knitter knits.
Think about how you knit when you knit in the round. One of the biggest differences is that you only knit on the right side of the fabric when you knit in the round. Using stockinette stitch as an example: When you knit flat, you knit one row (right side) and then turn your work and purl the next (wrong side). When you knit in the round, you join the stitches to make a circle and then knit every round.
Now, if you are one of the many knitters whose purls are looser than their knits, there is going to be a difference in tension between something you knit flat and something you knit in the round. Plus, you may modify your technique for knitting when knitting in round from when you knit flat. If you use straight needles when knitting flat, then switch to using circular needles or double point needles (dpns) to knit circular – your gauge may be significantly different. This is why I have come to the conclusion that it is good practice to swatch in the round when planning a project that will be knit in the round.
So how does one knit a swatch in the round? The first method is to cast on a enough stitches to give you a knitted tube that will be at least 4+ inches when laid flat. This could be the start of a sock or a hat. (Elizabeth Zimmerman said that “a hat makes a good swatch”.) Once you have a tube knitted of sufficient length for a good measurement, you treat this swatch the same way you would if your swatch that was knitted flat – i.e. measure, block, re-measure.
The second method goes by a couple of different names: “Speed Swatch” and “Circular Swatch with Floats” are two that I have found in my research. In this method, you use a circular needle and cast on the same number of stitches you would if you were knitting flat. But instead of knitting a row and then turning the swatch and knitting back to the end of the row, you slide your stitches to the needle on the opposite end and strand the working yarn loosely across the back and start knitting the next row. You keep repeating this process until you have a long enough swatch for good measurements. See pictures below:
Front of Swatch ITR — Knit with US 8 and Us 7 Needles 
Back of Swatch ITR
Once you have the swatch completed, you treat it the same way as any swatch – measure unblocked, block, re-measure. A note about measuring this swatch: Some sources suggest that it is easier to measure this swatch after cutting the loose strands so that the swatch will lay flat. Others simply say to measure the swatch by laying it as flat as you can. Logically, you are not going to want to cut the strands if you plan to reuse the yarn in the swatch. I’ve tried both ways and did not find a significant difference in measurements. Here are pictures of the swatch above after I blocked it and cut the floats to take the measurements:
So if you plan to knit a sweater in the round, please do your swatch in the round.
If you would like to see a video on this technique, here are three helpful ones:
Nancy Wynn, “How to do a Circular Gauge – Speed Method”: https://youtu.be/1W9XYgd3s7I
HowToCast: “How to Knit a Circular Gauge Swatch”: https://youtu.be/E1z2pbRmddY
11 Gauge Swatch Secrets PLUS How to Swatch in the Round | Off Our Needles S3E1: https://youtu.be/tv7uy0HetrI