Here is a photograph of a recently hatched monarch first instar caterpillar. 

It is important, while looking for caterpillars in the wild, to familiarize yourself with this particular chew pattern (some call it skeletonizing) that is unique to young monarch caterpillars.  Many insects chew on milkweed plants; but if you are familar with monarch's distinctive chewmarks, it will make your caterpillar hunting more productive. 

Using this technique (recognizing the unique chewmarks of your early instar caterpillars) can be very helpful with searching for other species of butterflies as well.