Symbolism, Imagery, Allegory
Nothing foreshadows the violence of war quite like a bloody hand twitching on the ground, right? Poor Otto and his hand.
Otto loses his hand for making counterfeit money: "A white, wriggling thing struggled in the char-dust on the plank floor and my master's cry was one of disbelief" (1.23). Yikes. Needless to say, Edmund is horrified. Not only has he never seen anything so disturbing, but Otto is like a father to him, too, which makes his pain only more bothersome to our main man. What we have happening here is extreme violence and ordinary life coming up against each other—it's an omen of what's to come for Edmund as he sets out, finding himself constantly shifting between the mundane and the terrifying.
There's something subtler going on with Otto and his hand, though. See, he loses is because he breaks the law. After the men cut off Otto's hand, they say, "'We'll have two right hands, side by side'" (1.24)—in this day and age, as Otto's apprentice, Edmund, is implicated, too. He is, you might say, an extra limb of Otto's. While the men don't manage to take Edmund's hand, in being forced to make it on his own without Otto, we can see Edmund as a sort of severed limb.
And as a severed limb—a.k.a. out on his own in the world away from Otto—Edmund really struggles to hack it. It's only thanks to Nigel that he does, really, which let's us know that Edmund remains dependent upon other people. Like a severed hand, he can't stand on his own.
So at the end, when Edmund is considering choosing his own course, we realize just how much he's changed and how far he's come. Set loose by Nigel, Edmund finally seems ready to stand on his own two feet.