Here is my attempt to explain how the forge works.... hope it helps
HOW TO FORGE
To forge you need material, steel, and an extra equipment. Level one does not need the equipment.
Colors are levels they are important
To upgrade the color for material you need 4 of the same material and color.
To upgrade the color on equipment you must start with level one equipment forging the color wanted upgrade accordingly.
See the rest of the guide for more info.
There are a few parts of Forging
The equipment you get by forging, there are 5 different types BOOT, PANTS, SHIRTS, HELMETS , AND RINGS, each have 5 different levels one, five, ten, fifteen, and twenty. Each level has 1 to 3 types that give different buffs. They also have 6 colors that make them stronger.
There are many types of Material from crystals, garnet to fur and herbs and more in between. Each give different buffs to the equipment you can find this information in the storage box by clicking the material.
You get materials several ways, Gifts from the port, Killing monsters and farming. You need them to forge equipment.
There are 6 different colors from lowest to highest: white, green, blue, violet, orange and gold, the better the color the better the Equipment.
Click image for larger version.
When you get Material the color is white or green. In order to upgrade the color you need four of the same kind and color in order to upgrade to the next level. This is done going to storage box in the blacksmith click on any material that have four or more. Then synthesize. You’ll receive one of the same materials of the next color. In order to get to the highest color you will need to synthesize each level of color. Four green make one blue, four blue make one violet, four violet make one orange and four orange make one gold.
In order to forge Equipment you will need to have the material, the steel for level 1, for levels 5 and higher you will also need equipment of the same level or one lower. You do not lose the equipment used to forge only it's color.
It is the best to forge when you have the material and the equipment all the same color and the higher the color the better. This gives you a 100% chance on getting that color.
An example is forging a Thick leather boots level 10. You need 17.400 of steel, garnet, jade, fur and any Equipment level 5 or 10. You have white jade, green garnet, blue fur, and a green armor (equipment). There is an 18.18% chance that the boots will be white, 72.72% chance that they will be green and a 9.09% chance they will be blue. You can find the percent just above the material in the forge room. If you diced to forge, you will gamble on the color it could very well turn out white. There is a little possibility that my boot will be blue. So it's better to wait for those level 10 boot and forge them when you have everything blue or even a higher color.
In order to have gold equipment you need to start with gold equipment level one and upgrade always with gold.
HOW TO EQUIP YOU AVATAR
When you collect your forged equipment it will give you the option to change the equipment.
It is advisable to check and see what buffs you have and change the equipment as often as needed. For example The Elemental Ring level 20 is for building however if I am going to attack the Serpent´s Eye ring level 20 is better. Having both allows me to change as needed. Make sure to forge the ones you need many are very similar.