The Importance of Limit Setting:

Inside the head of every young child is sheer chaos.  Children wonder about everything, but they do not possess sufficient language to ask the questions that would help them to understand their world and make order out of their internal chaos.

Requirements For Successful Limit Setting:
1) Understand your child's developmental stage - read The Magic Years by Selma Freiberg.
2) Be a detective.  Figure out the motivation that is prompting your child's behavior and respond to what is motivating your child, not the behavior.  The behavior is for you to stop with a word or physically, if necessary.
Example: Your child is throwing things that are not for throwing.  In this case, the child's motivation is to find out what is for throwing and what is not and to find out what will make Mom and Dad angry and what will not.  In addition, if Mom and Dad are angry, will they still be my Mom & Dad?  Your job is to stop the behavior and address the fact that such things are not for throwing.  If you do get mad, reassure your child that, no matter how mad she makes you, you'll still be her Mom or Dad.
3) Make a plan and follow through.
Example: Your child asks for a cookie at dinnertime and you say, "No".  A tantrum ensues.  It is not enough for you to simply say, "Go to your room."  You need to tell the child when it will be time for a cookie.  Make a plan and follow through with it, without your child having to ask.  Your child may not ask or seem interested, but you have to initiate the following through.  Following through with the plan lets your child know that your "No" was not unreasonable, that there are appropriate times for things, and teaches him when the coveted thing or action can be at reach.  This builds trust in you and your responses.
4) Be consistent.  Knowing what their world's expectations and rules are is reassuring and makes children feel more secure.  Therefore, it is of the utmost importance to set limits clearly and enforce them without fail, in a most consistent way.  Your child's job is to test what you said.  He will do it over and over to verify that this rule does not change.  Again, this is why consistency is a must.

ANTICIPATORY ACTIONS:
As much as possible try to anticipate problems before they happen.  Making a regular practice of these two things will help.

 - Announce any new plans
Describe how it used to be and how it is different now.  (You can add that it might be hard for him/her at first, but that you will be there to help him/her remember the new plan).

 - Give 5-minute warnings
Before transitions (i.e. from playtime to mealtime), tell your child there are 5 more minutes to play, and tell her what will happen next.

ACTIONS TO TAKE "IN THE MOMENT"
If the child is having a hard time stopping, it is your job to help him stop.  This is the main way your child develops the ability to stop himself.  In early childhood, you , as the parent, provide the external control that will be internalized by the child, so that she can begin to manage her own emotions and actions.

- Validate Feelings
I see it's hard for you to stop playing.  I know.  It is hard, and the plan is that it's bath time."

- Reassure for the future
"You'll get to play with that again tomorrow."

- "Can you stop yourself, or shall I help you?"
If the child is still not stopping after you validate feelings and reassure for the future, give him the choice of stopping on his own, or you will help him.  As the child gets older, she will most likely want to do things by herself, so this may be enough to help her stop.

 - If the child is able to stop himself, you can say, "Great!  I see that you can do it yourself!"
 - If he's not, you say, "Okay, I'm going to help you."
A toddler may still need help from you to physically stop.  At this point, you stop the child physically (with gentle hands, but firm, if necessary - careful not to have "angry hands"), and bring her to the next activity.

- "Are you thinking that if you keep crying (sreaming, kicking, etc.) I'll change the plan? ... Because I won't.
If after you've stopped your child, he continues to be upset, you can verbalize that you won't be changing the plan, even though he is upset.  Sometimes this is enough to help the child's emotions calm down.

 - Hold the child, if necessary.
If her upset escalates into a tantrum, hold her physically, to keep her from hurting you, herself and others.  Hold her on your lap, with her back to you and cross your arms over her torso, with her arms crossed and your hands holding her hands.  If necessary, you should cross your legs, with her legs between your legs.  This hold communicates to the child that she is safe.  Keep your talking to a minimum.  You must say, "When your body is calmed down, I will let you go."

- Release your hold when your child is calm.

ACTIONS TO TAKE AFTER THE EVENT
Later in the day, choose a calm moment to revisit what happened with your child.

 - Tell the story of what happened.
For example, "You wanted to play.  Mommy told you it was time for your bath.  You couldn't stop.  Mommy helped you, and you were so upset.  You cried and kicked, and Mommy held you until those mad feelings went away."

 - Help your child feel finished.
"Did you want to tell me anything about that?"  Listen to what your child has to say.  After hearing your child's thoughts and feelings about what happened, reassure him by saying, "I want you to know that even when you get so upset, Mommy is still your Mommy, and Daddy is still your Daddy.  I am here to keep you safe.  Sometimes, I may stop you, even if you don't want to be stopped."

SUMMARY

 - Be extremely consistent.
If you don't set limits now, it's almost impossible to correct later.

 - Use simple, minimal language.
If you over-explain reasons, children tune you out.  Your tone of voice tells your child what you mean more than your words.

- Anticipate actions: Stop their hands, etc.

- Don't use, "If...then."
This sounds like a threat, which children respond to negatively.

- Don't use, "We don't yell inside."
Be direct: "I want you to stop yelling inside", or "The plan is no yelling inside."

SPECIFIC EXAMPLES:

Yelling
 - If your child won't stop yelling, tell her she needs to go to her room.
 - Walk her to her room, saying, "When you can stop screaming, you can come out.  I don't want to listen to that."
 - Don't close the door, as this is too isolating.
 - If she tries to leave the room, walk her back without saying anything.

Throwing food
- A toddler usually throws food for 2 reasons: either he is done, or he is being the scientist that all toddlers are (see The Magic Years for more on this).  He is thinking, "If I throw this, will it come back?"  Children want to see what will happen.
 - You can say, "Food is not for throwing."
 - If your child throws again, take the food away, saying, "When you throw your food, you are showing me that you are not hungry", or "...that you are all done."
 - When your child is old enough, she should take her plate to the kitchen by herself.

Throwing toys
 - Say, "This toy is not for throwing."
 - Take the toy away and say, "Can you remember that?'
 - If he throws it again, you can say, "You're not remembering the rule.  When you can remember that this toy is not for throwing, let me know, and you can have it back."
 - Your child will say that he is ready, and will of course test you, and throw the toy again.  It is crucial that you are consistent.
 - If he throws the toy 6-8 times in a row, you can say, "I can see that you can't remember the plan, or you don't want to.  I'm going to keep the toy for now.  Let's go find something that you can throw."
 - It may be that your child is more interested in throwing than in the toy.  You can go outside and find a ball to throw.  Give your child a ball, saying, "Balls are for throwing.  You can throw this ball."