The first thing you need to do, is to get your hands on a lot of socks. Now you are going to need a sock and stocking for everyone in the house, but normally the first few attempts are bound to end up getting wasted. This is why it would be smarter to actually go on and use as many socks as you can, so that you can experiment till you get just the right combination.
While getting the socks, you should also get your hands on all the materials that you could potentially want to use n making the stockings. However, make sure that you have ample materials for all the socks that you are looking to turn into stockings.
Once you have the socks and all the materials, it is time for you to start decorating the socks. Go on and add color to them, while focusing on red green and yellow. You can use your imagination at this point and do just about anything that you wish to do. However, make sure that you don't overdo it, since no one likes a stocking, which has more decoration than a person can bear.
After you are done making the sock and decorating it the way you want to, the last thing you want to do is to make a little loop on the back, so that you can hang the sock via that part. You can either use a thread and needle to make this loop, or use some wool and knitting tools to get the job done.
It is a very minor part of the whole thing, but it is something that you need to ensure that you do.