To sign lost, form both hands into a bent shape, with all fingers touching on each respective hand, and the middle knuckles of one bent hand touching the other, as the thumbs stick up front and center. Then separate both hands as you move them downward and away from each other, ending up in a loose, open shape, fingers facing down. It is as if you lost an object that was just in your hands a moment ago.
Teach your toddler the lost sign when they lose a toy or crayon, and be sure to show them you'll be looking for it with or for them. If finding it is impossible, tell your toddler that all will be well, you will replace the lost object if and when possible.
Teach your toddler this sign in conjunction with toys or items that your toddler uses frequently and therefore have the chance of being lost amidst a pile of other toys, crayons, and so on.