How the bloody **** do you make caramel?

Because the soft caramel you are looking for is made with sugar, butter and cream.

Brown your sugar, then add your additional liquid. You can always add water at the beginning to moisten your sugar so it cooks more evenly but the key is to thin it out after it's reached a caramel colour. Also, milk tends to separate at high temperatures so use a high fat cream instead.

I am assuming you are wanting to make caramel sauce and not caramel candies. Here is a basic recipe that I use:

1 pound sugar, granulated
1/3 cup water
1 Tbsp. Corn Syrup
1 1/2 cups Heavy Cream
2 tsp. Vanilla Extract or 1/4 cup of booze (rum, bourbon, frangelico)
2 oz. Butter, unsalted

Combine the water, sugar and corn syrup in a large sauce pot (larger than you think you need) and cook until a deep brown. Meanwhile heat the heavy cream. When sugar is a deep brown add the cream. Be careful as it will boil up quite a bit, that's why you need to use a much larger pot than you think you need. Continue to cook, over medium-high heat until the sugar melts again and everything is well combined. Add the flavoring and butter. Allow to cool. This sauce will be mostly solid at room temp. It needs to be slightly warm to pour nicely. If you want something that will pour at room temp. just increase the amount of cream used.

A note about the water and corn syrup used in the recipe. The corn syrup is a invert sugar and by adding it to your granulated sugar it helps to keep the sugar from crystallizing, which is always a possibility if you aren't careful. As for the water, I have caramelized sugar many times without adding water, but it needs to be tended carefully or it will burn. All the water does is help get the sugar melted. Sugar won't caramelize until all the water has evaporated so the less water use the more quickly you will get to the point of caramelization.

If you're making caramel as in candy, there are several ways to go about it.

what I make at least once a week goes something like this:

1,360 gr milk
280 gr fullfat (33%) cream
680 gr sugar
560 gr Corn syrup or glucose

boil, stir occasionally until about 110 C, then add in
50 gr butter
continue boiling under constant stirring to around 115, then pour out.

You need a "doctor" or interfering agent such as corn syrup or glucose to prevent the sugar from cyrstalizing. You can make caramels with little or no corn syrup, but within a few days they'll crystalize.

With tht much corn syrup in the recipie, you can stir like a mad-man and not worry about crystalizing

To put this in reverse, plain caramel -- made as you have done with water and sugar and nothing more -- is generally a base or a glaze. As a base, you add things like butter and cream and such to make caramel sauce or candies or whatever. As a glaze, you use various techniques to manipulate it while hot and then let it harden; for example, you can grease the outside of a smooth metal bowl and drizzle the caramel over it in random swirls, let it cool, and lift off a hard caramel cage. No, it will not stay soft, unless you add a softener, normally some kind (or kinds) of fat.

Add butter and use heavy cream for softer caramel. Also, are you using a double boiler or a copper pan?