My way of painting digitally is not much different to traditional painting, I think.
My English is not very famous, so I hope you will understand, what I mean
1. I took the reference photo, set the resolution to 300 dpi, and created a new layer with a grid.
2. I opened a new file, which would be my drawing, created a layer for the background (a simple color gradient - the background will be finished in the end). A second layer with the same grid as in the original photo.
3. A third layer with the sketch. This layer will be deleted when all's finished (together with the grid).
4. The fourth layer is for my drawing. I chose a dark brown and developed the shape of my character. (I inverted the color of the sketch in order to be able to make it out - hard to see in this submission, though. )
5+6. I add colors with a brush where I set the transparency to a very high level, so the colors would mix together.
7. I use this brush together with the smudge tool to finish the face. The same way I will continue with every part of the picture.
8-10. After finishing the hair I worked on his costume - the horse in front will be the last.
11. The advantage of painting digitally using layers: I paint the background in the end.