How can a player in ALO make an original Sword Skill?
The wiki page has an explanation on this:

To record a new OSS, the player needs to open the menu, move to the OSS panel and activate the Sword Skill recording mode by pressing &quot;Start&quot; there. After that, the player only needs to swing one's weapon in a desired set of moves and press &quot;Finish&quot; once done. The downside of this system is that such skills are only accepted by the system if they meet very high speed, combo and execution requirements. To create an OSS the player must be able to execute the skill flawlessly, at the same speed as the completed skill but unassisted by the system. This should be impossible without the system's assist, but players have managed to create various OSSs.
Besides adding the ability to automatically use desired moves, it also adds elemental damage, which can be from fire, earth, lightning, water, light and darkness, to the Sword Skill. A skill can have up to two different elemental attributes and the damage rate of the skill is a combined percentage between the physical damage and the magical damage.

http://swordartonline.wikia.com/wiki/Original_Sword_Skill