Dai Jin painting: stage 2.

Dai Jin painting: stage 2., a photo by Paul&Siu on Flickr.

Stage 2 will comprise of selectively strengthening the edges between layers of scenery,  by darkening of lines, or new dark lines, and/or dots. Then when dry, add color.  When glazing on the color,  use a brush stroke consistent with the texture or lay of the object.  Thus, if the rock runs at some angle,  glaze in the same direction. 
Typical colors: For rocks, mix brown and blue.  The bright side of the rock,  use brownish tint.  For the shadow,  use bluish tint.   Tree leaves, use yellow mixed with black. 
Make sure the colors are well mixed and dispersed. They should be a dilute mix.  Intensity is built up by repeated layering of colors.   If you color too intensely in one go, it will look too stiff. 
As for the interface with the fog or clouds,  use a dry brush to provide an irregular edge.   For the edges of the waterfall, also use a dry brush, to ensure no bleeding into the waterfall,  which must be kept white! 
See my version of coloring is as a guide. 
Keep in mind there is still stage 3, which is a wet wash process,  to come.