Celeste,
Yes, selvedge to selvedge. Be consistent with all of your folding. If the slevedge is missing, stretch the fabric east and west, then north to south. You will see the difference in the stretch. East/west will stretch more. Sewing a strip from an east/west cut to a north/south cut can cause some aggrevation.
SOOOO, if you are cutting strips for a log cabin quilt or for four patches strips, make sure your fabrics are all cut from the same direction. If consistently folded you will not need to test for the stretch.
Good luck. Suzanne