Chain stitch can be used in many applications to create a pretty effect.  Here I will demonstrate how to make a basic chain.

Step 1: Begin by bringing your thread through from the reverse side of the fabric to the front, as shown in the 'getting started' section of the embroidery 'step by step'.

Step 2: Return the needle into the front of the fabric, near to but not into the point where your thread is coming through. Before pulling the needle through, poke it back up from the reverse of the fabric through to the front where you want the end of the chain loop to go and wrap the thread around the end of the needle to form the chain loop (see picture below). 

Step 3: Pull the needle and thread through the fabric gently, as shown below.  Try not to pull the chain loop too tight or the loops will not sit correctly and will be misshapen and thin.

  

Repeat steps 2 and 3, taking care to place the needle inside of the loop that you made (as shown below) and to wrap your thread around the needle in the same direction in each time for a neater finish to your chain.

  

Continue your chain in this manner, following the direction that you want your chain to go.  Finish off the chain by pushing the needle through the fabric just above the last chain loop.  Pull the thread through to the back of the fabric and secure the threads by weaving them into the threads on the back of the work.

Your chain could follow a predetermined line that you have drawn onto the fabric with erasable pencil, transfer pattern or the edge of a printed or painted design, or you could allow your chain to progress 'freehand' with no guidelines for a random, creative pattern.