Peruse various examples of graffiti to get a sense of what you do and don't like about the art form. Get ideas and take note of the basics of the art, including the overlapping style of the letters, the malformation of the boundaries of traditional English letter characters and the use of colors, border, outlines and shading.
Trace your proposed design on a sheet of paper, paying special attention to placement of any letters/characters as well as their borders. Trace lightly, as you'll mostly likely need to adjust the spacing and/or placement several times until you're satisfied.
Adjust the placement/setting of your art's various letters/characters/symbols until you're satisfied with the overall effect.
"Ink" the final tracing with the black marker. This simply means to trace the outlines with the marker to form rudimentary outlines to be filled in later.
Test a separate piece of paper with the corresponding colored pencil you'd like to use in your final illustration. If necessary, mix colors and shade them to create the exact look you need.
Color your graffiti in carefully; if there's one thing that can ruin a great piece of graffiti art, it's sloppy coloring. Graffiti is all about bright, intense colors applied with military precision, so your graffiti needs to exemplify those traits.