The "magic ring" is a technique used to start crocheting in a circle. A circle, or ring, of crochet foundation is necessary for many different patterns including hats, blankets, and rugs. The standard method leaves a large hole in the finished work; the magic ring solves this problem. Although the magic circle takes patience to learn, once you grasp how to make the magic circle you will have another invaluable tool in your crafting kit.
Lay the yarn out across the underside of your fingers. Pinch the tail end -- the end of the yarn -- between thumb and forefinger. Wrap the working end (pulled from the skein) around your fingers to create a loop. The working end should lay over the tail end.
Hold the loop with your thumb and forefinger. Pick up the working end of the yarn from behind the tail end with your hook and chain one. Chain two if you want to double crochet, three if you want to triple.
Pick up the working end and crochet another stitch -- single, double, or whatever other stitch you used for the first one -- into the loop. Repeat until you have the desired amount of stitches on the loop. Attach the last stitch to the first with a slip-stitch.
Hold the ring of stitches and hook with one hand while you pull the tail end of the yarn with the other to tighten the inner circle.
Weave in the tail end to ensure the circle does not stretch.
If you do not weave in the tail your work may stretch out while crocheting further.