Computerized sewing machines often times have a shirring stitch built in. I have a BabyLock Espire and my machine has stitch called the elastic zig zag stitch. It sets the tension for me and I just have to choose the stitch width and length. I set my length to 3.5 and width to 4. Elastic Zig Zag stitching looks like this:
Either stitch works great, but depending on you machine you may need to play around with your tension and stitch length to get it right.
4. When you are ready to start make sure you have about 1" of elastic thread pulled from the bobbin so that you have enough to tie it off with your ending piece. Start sewing on a side seam with the top of your fabric facing up and the bottom of your fabric against the machine. You want to see your regular thread on top NOT the elastic thread. That should only be seen on the back side of your fabric.
When shirring around a neck line or on short sleeves I like to start about 1/4" away from the edge so that it gives it a cute ruffled look. I usually space my rows1/4" apart on sleeves, necklines, and chestlines. If I am doing several rows of shirring for a bodice or something around the chest I set my rows 1/2" apart. Sometimes if you put your rows too close together it makes the shirring really tight.
Once you have gone all the way around to where your threads meet up make sure you leave about an inch of elastic thread so you can tie it off with the starting piece. Gently tie 3-5 knots trying not to break the thread:
When you are all done with your shirring to tighten the elastic thread, steam it with an iron. Don't pull on the threads to tighten them, they will break! After you steam the elastic it should shrink up to look like this: