This photo tutorial below will teach you how to make the magic ring (sometimes called a magic loop, or an adjustable loop). This technique is used in a lot of amigurumi (crocheted stuffed toys) and it is also needed when you begin a crochet project from the center-out (both interlocking crochet and mosaic crochet)! Please watch my short video tutorial to see it in action!
To begin, grab your yarn and a hook. This technique will work on all types of yarn: any weight, any fiber. Make sure to use an appropriately sized hook for your yarn.
Lay yarn across front of index and middle fingers, loose end hanging down.
Wrap yarn over and behind fingers then back up the front of your hand; cross yarn over yarn towards your wrist and hold working end of yarn with pinkie finger.
Insert hook under yarn closest to fingertips, grab the other loop of yarn…
and pull a loop up (with a slight clockwise twist); chain 1 to hold it together.
You will crochet over the side that has 2 strings and when you are done you can tighten the loose end.
Hope this helps! I believe there are other ways to achieve an adjustable but this is the method that finally worked for me!