So how do you touch up a paint chip

[Smead]

So heres what I understand,

You, depending on the size of the chip, use your touch up paint frugally and just touch it up little by little till
it sits just above the surface, using the clear coat last.

So, when you're at this stage how do you smooth it down and make it level with the rest of the paint?

[Merrick]

What colour are trying to touch-up? If your car is silver the touch-up will be almost always visible due to flakes in the metallic and the light reflection. However you can try to put very small amount of paint in the cavity and top it up with a clear top coat. To make it flat use razor blade to press the clear coat down when is between semi-liquid and dry. Wait 24 hours before polish the repaired area.