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Slang rises out of communities of speakers or writers as shorthand for objects, actions, and concepts. It is a method of exclusion, as only insiders will be able to understand the slang terms. Slang starts as insider language, but can grow outside of that subculture if it becomes popular enough. Slang is constantly evolving, and words and phrases can fall out of favor very rapidly. This is especially true if the slang begins to spread outside of the initial culture in which it was created. Avoid creating slang that is based off terms that are no longer in common use, as it will give your creation an archaic feel. This is when you cut off a portion of the word, either at the beginning or the end. Mash two truncated words together to form new compounds. You can combine this with adding prefixes or suffixes to create almost entirely new words. For example, instead of saying "all right," the words can be truncated and mashed together to form the word "aight." This is simply taking a noun and making it into a verb. For example, the word "text" is traditionally read as a noun, but can now also be used as a verb referring to sending a text message. Another example of verbing is the word "party." Originally, it was a noun describing a gathering of people. Now, it also means to engage in the act celebrating, usually with drinking connotations. The context of the word dictates how it is interpreted. The word gun is a noun, but can be used as a verb when you "gun someone down." Verbing a noun can add spice and drama to an otherwise bland sentence. Experiment with nouns to find one that works well with the verbing process. Not every noun can be verbed, but you can create a powerful and memorable sentence when you find on that can. Slang grows outward from peers, so in order for your slang term to work, it needs to be spoken and in use. Use it in conversation, but don't necessarily give away that you're using a new word. Let your peers infer the meaning through the context of what you're saying. This will build credibility for your word.
Understand the concepts of slang. Truncate a word. Try verbing a word. Spread your new slang word.