Beautiful is signed starting with your dominant hand open, thumb pointing at your chin and fingers pointing up. You complete the sign by rolling your fingers across the front of your face in clockwise fashion, ending with your fingers and thumb together around your chin area.
More abstract adjectives like beautiful are taught through giving a child lots of exposure to the sign in different contexts. You might tell that a flower is beautiful, that a piece of art is beautiful, or that the stars are beautiful. Generally, children don't grasp the exact meaning of the word until they are older, but they will understand that when you describe something as beautiful, it means that it is special and something that they should pay attention to. Often, when young children start using the sign themselves, it is their way of telling you they think something is interesting and that you should look at it, too. This sign is a great way of finding out what is most remarkable to your baby.
Teaching adjectives such as beautiful is a more advanced skill. When teaching these types of descriptive signs, it is important to provide variety for the things you describe as beautiful, so the meaning of the word is generalized and not applied to one specific thing.