First you need to make a "face mould" and there is a fair amount of geometry, and it looks like a mess in finished form, but once you really dig into it, it's not that complicated.
Here is a good website that walks you through the process of making a face mould for you're wreath:
http://www.thisiscarpentry.com/2011/11/25/traditional-tangent-handrail/
You should also have at least a couple reference books on the subject if you are going to attempt this.
To start making the face mould you'll need to know the basics of the railing system you are making the wreath for. If the stairs have different pitches, or if you are making a wreath that goes from level to rake, etc, the geometry for the face mould will different from what I describe below and you'll have to consult a reference for that. What I am showing is when both pitches are both 30 degrees. But you need to know the pitch of both flights of the stairs, the radius of curvature for the wreath (in my case it was 3"), and the profile and dimensions of the railing you are using (mine was 3" tall by 2.5" wide).
I am going to assume that you have your face mould done. The face mould is the macarroni shaped blue piece and the angled blue square is what you use to mark the butt ends of the wreath to give you the twist angles and layouts for shifting the mould. Transfer both of those drawing to tracing paper.
Now you glue up a blank for your wreath. Make sure it is oversize in length and width, but plane it to the exact height of the box that surrounds the angled blue square. Trace your face mould on the top of the blank, leaving about 3/4" inch margin of wood around your face mould.
Cut the butt ends of your blank on the miter saw.
Line up the centerline of the angled box with the centerline of the face mould and transfer your layouts, do this for both ends, and make sure they twist in the direction you want.
Now you need to "shift the face mould" to get the correct top and bottom positions for the face mould. You start by extending the angled centerline of the blue box up and across the top of the wreath blank on both ends, on the top and bottom. Then move your face mould so that its centerlines match up with those. Trace that with sharpie.
Now you are ready to cut out your wreath, the easiest way to do this is to build a little stand out of wood that will hold your blank at the exact pitch of the stairs and run it through the bandsaw. The graphic below is a little distorted from the angles, but the wreath blank is set up so that the sides of both squares on the ends will be cut plumb in this position. In my case the stand is 30 degrees in both directions. Don't use nails, as you will be cutting through the stand.
This what it will look like if you cut it right.
Now you turn it on its side and run it through the bandsaw again to square the top and bottom of the wreath. You have to be careful, because it is a real squirrely cut to make that involves rolling the wreath through the blades, and it is not well supported.
If you did it right you will have your completed rough wreath.
Now you'll need to carve it, but I won't go into that here.