After pressing Add Sequence Step, you'll be redirected to the Template creation pop-up.
Write down your email template using any number of variables ({{FirstName}}, {{Company}}, etc.) to personalize it.
Specify the subject where variables can also be inserted {}. If you want the email history of your follow-up sequence to show up in the same thread, leave subject lines for all steps (step 2 and beyond) blank.
If you already have an email template created, select it from the drop-down menu.
Add attachments and images to your email if needed.
You can also add CC'd contacts to your messages, separated by comma (not ;).
After you've created Step Templates, here is how your email chain should look: