This is the “every day life” in which the story is set. Think of Cinderella sweeping the ashes, Jack (of Beanstalk fame) living in poverty with his mum and a cow, or Harry Potter living with the Dursley’s.
Something beyond the control of the protagonist (hero/heroine) is the trigger which sparks off the story. A fairy godmother appears, someone pays in magic beans not gold, a mysterious letter arrives … you get the picture.
3. The quest
The trigger results in a quest – an unpleasant trigger (e.g. a protagonist losing his job) might involve a quest to return to the status quo; a pleasant trigger (e.g. finding a treasure map) means a quest to maintain or increase the new pleasant state.
This stage involves not one but several elements, and takes up most of the middle part of the story. “Surprise” includes pleasant events, but more often means obstacles, complications, conflict and trouble for the protagonist.
Surprises shouldn’t be too random or too predictable – they need to be unexpected, but plausible. The reader has to think “I should have seen that coming!”
5. Critical choice
At some stage, your protagonist needs to make a crucial decision; a critical choice. This is often when we find out exactly who a character is, as real personalities are revealed at moments of high stress. This has to be a decision by the character to take a particular path – not just something that happens by chance.
In many classic stories, the “critical choice” involves choosing between a good, but hard, path and a bad, but easy, one.
In tragedies, the unhappy ending often stems from a character making the wrong choice at this point – Romeo poisoning himself on seeing Juliet supposedly dead, for example.
The critical choice(s) made by your protagonist need to result in the climax, the highest peak of tension, in your story.
For some stories, this could be the firing squad levelling their guns to shoot, a battle commencing, a high-speed chase or something equally dramatic. In other stories, the climax could be a huge argument between a husband and wife, or a playground fight between children, or Cinderella and the Ugly Sisters trying on the glass slipper.
The reversal should be the consequence of the critical choice and the climax, and it should change the status of the characters – especially your protagonist. For example, a downtrodden wife might leave her husband after a row; a bullied child might stand up for a fellow victim and realise that the bully no longer has any power over him; Cinderella might be recognised by the prince.
Your story reversals should be inevitable and probable. Nothing should happen for no reason, changes in status should not fall out of the sky. The story should unfold as life unfolds: relentlessly, implacably, and plausibly.
The resolution is a return to a fresh stasis – one where the characters should be changed, wiser and enlightened, but where the story being told is complete.
(You can always start off a new story, a sequel, with another trigger…)