Telling scary stories is more of a camping thing, but you can tell them at slumber parties as well.
All you need is a nice dark and scary space, like an attic or basement, and a flashlight. Think of a subject and start telling the story. In case your imagination is not so good, you can also get a lot of fun scary tails online. Just google it!
It's also a good idea to use a flash light. Sit everyone in a circle and pass around the flashlight. The one holding it has to tell a story. For that extra scary effect, he should light his face up from under his chin.
Another fun way to tell scary stories is by passing the flashlight around. Whoever is holding the flashlight has to tell the next sentence of the story. This way everyone is involved and only god knows how the story will end:)
You can also use some special effects or get someone to scare all your friends at the end of your story. For example, you can get your dad to jump out of the closet at the end of your werewolf story! Use your imagination.