To sign room, make a square with both hands directly in front of you. First, hold your flat hands parallel in front of your body, about a foot apart while both palms are facing inward. Then move both hands so that they end up still parallel but with the palms facing each other. This suggests the squarish shape of a room.
Teach your toddler the room sign when identifying locations around the house. Even if the dining room, living room, kitchen, and bedroom all have different purposes, your advanced toddler can begin to grasp that these are clearly defined spaces serving various functions, so all are classified under the term room.
The sign for room is best for a toddler who is beginning to grasp abstract concepts or general classifications of places and things. Teach it in association to different sections of the house.