Though this is called Punch2, all it actually is is a strengthening of your already existing Punch. Your ability to hit is not increased, but the damage done and critical hits caused are vastly more likely. For this step you need to go to the pool outside of Stonehold and drop a weapon in it. I used a broadsword I picked up at wraiths. From the Voln courtyard go W, W, W, go trail, S, S, SW, W, go bridge, W, W, NW, SW, S, SE, S, SE, S, S, S, SW, S, S, SE, SE, SW, W, S, S, S, S, SE, SE, NE, NE, E, E, go bridge, SE, S, SE, S, E, E, E, S, go crevice, SE, climb rubble, S, climb rubble, SE, SE, E, E, go trail, up, up, E, S, SE. There drop the weapon in the pool and recieve the completion message. Go back to the monk and he will instruct you in the Symbol of Punch2.