Magic loops are so much easier to demonstrate than explain, so let's see if I can do a step-by-step photo tutorial to try and make things a little easier.
So, instead of making a normal slip knot, you do this (no knots)...
- Wrap the yarn around your fingers like shown in this photo.
- Pop your hook through the hole and pull the yarn through from the back to the front.
- As if doing a chain stitch, pull your yarn through the loop you have just made.
- Pull upwards until it is tight.
- Now, pull the working end of your yarn so the stitch tightens up enclosing your hook (keep your tension tight here as this loop will work loose otherwise).
- Start working your pattern, working your first number of stitched into the loop.
- Once all the stitches are in place, pull the tail tight and slip stitch into the first stitch to join.