"Knocking on wood" is done either: 1) to invoke the protection of the spirit of the wood - the dryad - which lived in the tree. or 2) to invoke Divine protection by referring to the wood of the "True Cross."

To touch wood is a superstition action to ward off any evil consequences, say of untimely boasting; it can also be a charm to bring good luck. The origin is quite unknown, though some writers have pointed to pre-Christian rituals involving the spirits of sacred trees such as the oak, ash, holly or hawthorn. There is an old Irish belief that you should knock on wood to let the little people know that you are thanking them for a bit of good luck. Others have sought a meaning in which the wood symbolises the timber of the cross, but this may be a Christianisation of an older ritual. The children’s game of tag in which you are only safe so long as you are touching wood is not likely to be connected (an indicator of this may be that at times iron was substituted for wood if there was no wood handy). The phrase itself seems to be modern, as the oldest citation for touch wood in the Oxford English Dictionary dates only from 1908;(Incidentally, that work doesn’t have a single example of knock on wood, which is the American version of the British touch wood.)

if you say something like....im not going to get caught and then you knock on wood...you pretty much protect yourself from jenxing yourself.

Like most superstitious habits, there is no rationale behind it, only superstition. "Knock on wood" is an Americanized version of the older English phrase "touch wood". It is believed that by being a tree hugger you will grant yourself protection against something you were just speaking about (example: I haven't been mauled by an elephant, knock on wood). There are several possible crackpot reasons as to how this odd ritual came into practice. Some think has to do with spirits who live in trees, and that by touching the tree would call their protection, or if the spirits were mischievous it would sedate them. A possible Irish origin claims that you knock on wood to let the leprechauns know you are thanking them for good luck. Some say it goes back to an old children's game of tag where you were safe while touching a tree. A Christian origin claims that touching wood helps remind us of the cross on which Jesus was crucified while a Jewish version says it appeared during the Spanish Inquisition when Jews built secret temples which required special knocks to gain admission. In the end however, it seems the superstition isn't as old as people claim. The earliest record of the phrase comes from 1908, long after many of its bizarre origins are supposed to occur. Regardless, there haven't been very many studies to see if knocking on wood really does help protect you, so it's hard to say if it really works, my money's on 'no'.