The Checkered Chain Stitch is also known as the Alternating Chain Stitch, Two Color Chain Stitch and the Magic Chain Stitch. This stitch uses two colors of threads through one needle, and is super easy to do and I love the effect!
Here are two threads on my needle. Bring the needle up like for a chain stitch.

Start like you would a basic chain stitch, by taking a small stitch, but only take one thread under the needle.

For the next chain stitch, put the other thread under the tip of the needle.

And, the next stitch use the first color again.
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And, switch the colors again.

Here is what the Checkered Chain Stitch looks like! You can try a variety of color combinations.

The finished circle of the Checkered Chain Stitch!

Another close-up of the Checkered Chain Stitch.

I felt like it just needed some French Knots inside with the two colors of threads!

Here is a sample using a variety of threads to see how it stitches out.
Row 1: Metallic frost ray and #3 pearl cotton
Row 2: 2 colors of silk straw
Row 3: #3 pearl cotton, one variegated and one solid
Row 4: 2 colors #3 pearl cotton
Row 5: 2 colors #8 pearl cotton

Check out all of the embroidery projects on Create Whimsy!