Time out is a very effective discipline technique and will work with children as young as 18-24 months old. By using this method of discipline you are giving your child time out from positive reinforcement (which includes any parental reaction such as yelling or hitting) after he misbehaves. Prepare a time out chair, which can be a chair in any room of the house, a space on the floor, the child's bed, etc
or any place where he is isolated from interaction with others. Use a kitchen timer to count down your child's punishment time, which is usually one minute per year of age.
Unlike the way it is used for older kids, time out for toddlers is more so that you can give your child time to regroup and calm down. A toddler will likely not sit still in a time out chair, even for a minute or two, and you shouldn't try to force him to or wait for time out to start until he has been quite.
When you want your child to follow a command, ask him in a firm, but pleasant voice. Allow your child about five seconds to do what you have asked, and if he does not, then make direct eye contact with him and say "If you do not do what I asked, then you are going to sit in time-out" (and point to his time out chair). After this warning, if he still does not do what you have asked, then say something like "You have not done what I asked, so you have to go to your time out chair." Give these commands in a louder and firmer voice to get your child's attention, but do not yell or get angry.
Now calmly take him to his time out chair, ignoring any protests or promises he may make, and say "You stay in your time out chair until I tell you to get up." He must now stay in time out until he has been quiet for the punishment time you have set for him (usually one minute per year of age). Remember that, for older kids who are being defiant, time out does not begin until your child has been quiet, even if takes several minutes or an hour. That doesn't apply to younger toddlers and preschool age children though.
After an older child completes his time out, then he is to agree to do what you had told him to do or if he had been misbehaving, and agree to not to it again, otherwise he is to go into time out again. Again this doean't usually apply to toddlers or younger preschool age kids.
If your child leaves the time out chair, put him back in the chair and warn him "If you get out of the chair again, I am going to discipline you (by removing some desired activity/possession, etc.)". If he gets up again, just put him back in the chair without warning him again and apply the discipline technique. If he continues to get out of the chair, you can consider sending him to his room, or another room in your home, for the time out period (remove all toys, TV, video games, etc
You should probably only pick one or two forms of misbehavior that you will discipline with time out when you first start to use this method.
Remember that this is just one method of using time out and you will likely have to modify it to fit your own parenting style and your child's temperament. If it isn't working for you, especially if you are having to use time out several times a day, or your child doesn't quickly go to time out, then you should likely look for a different discipline technique or a different way of using this one.
And always remember that it is better to support and encourage good behavior instead of trying to eliminate bad behaviors.
Time out can also be used outside of the home, such as in stores, restaurants, etc. If your child often misbehaves in a certain setting, such as the grocery store, you should stop before entering the store and go over the rules that you expect your child to follow. Also, give a warning about what will happen if he misbehaves inside the store. If he does break one of the rules inside the store, you should now place him in time out.