As an educator of preschool age children for the last 19 years, I have helped many young children discover the joy of reading and language. I taught for several years in a Montessori preschool and used a similar method for teaching children to read throughout my career.
*Create a set of letter cards: Cut and glue pictures of objects that match each letter of the alphabet to 4 by 8 inch piece of poster board. Try and use 4 to 6 pictures for each letter. Laminate.
*Choose 3 letters each week. Sit with children facing you. Hold up one letter card at a time, telling the children, "This is A", but pronounce the "A" as it sounds, not its name. Ask children to name objects on the A card, repeating their words, putting stress on the A sound. Place the letter on the floor facing the child. Repeat with remaining two letters.
*Once all three letters are done and facing the children on the floor, ask each child individually, starting with the last letter used, "Show me A", Show me "R", Show me "T", again pronouncing each letter as it sounds, not its name.
*Starting with the last letter used ask the same child, "What is this?" and point to each letter. The child should be able to point to each letter and say, "This is A", using the sound.
Once the children have mastered the sounds, usually within the week if done on a daily basis, move on to another set of three letters.
To expand on this activity, after the last child in the group has completed the last step (What is this?), the children can take turns following directions with each letter. Say to each child, "Find the A and put it on your knee and put it back/put it on your elbow/behind your back etc." The children can also be instructed to place the letter cards around the room, under the table, on top of the chair etc. Once all three cards are placed, ask a child to locate and bring back a letter, always starting with the last letter used.
These cards can also be used for object matching as well. Collect objects that represent each letter of the alphabet. After each child has completed the three steps with each letter, ask each child to pick objects and match them to the correct letter card, again always starting with the last letter used.
Once a child has mastered the majority of the sounds of each letter of the alphabet, three letters can be placed together and the sounds become a word. For example, choose "at" as the last two letters, work on combining the two sounds, and then add a beginning sound, "r", "s", "c", "f", "m", to form a word.
The emphasis is always placed on the sound of the letter, not its name. Always start with the last letter used.
My own daughter learned to read with this method at the age of three and a half. She is now ten and reads/comprehends at a high school level. Several dozen children I taught over the years learned to read with this method.