Use worsted yarn, size 10 (US) needles - to make a smaller stocking, use a smaller needle, like 5 (experiment with the size you want the stocking to be. I made up this pattern years ago and use it every year.)
Cast on 18 sts in white,
knit garter stitch for 4 rows
change to red, green or Christmas varigated
Do stockinette stitch for 18 rows
Then:
Knit 7, increase 1 stitch in next 4 stitches, knit 7
Purl next row
Knit 8, increase 1 stitch in next 6 stitches, knit 8
Purl 1 row
Knit 1 row
Purl 1 row
Bind off
Note: sometimes on the last K1 and P 1 rows I change the
yarn to white to correspond to the cuff. Use your imagination
to change colors. Sew up, make a loop to hang.
I am a CESA Foster Grandparent in our elementary school (10 years) and every year I make about 100 and give them as Christmas gifts to the kids in the classes I am working in (mostly 3rd grade). I put in a Christmas pencil and a small candy cane in each stocking. The kids love this!