Hey!
Excuse me if I'm covering ground you're already familiar with.
Those 2 stages, steeling/spending resolve and encountering are inexplicably linked. That is, what side up you play your card (conquest or peril) in stage 2 is determined by whether you spent resolve or steeled resolve in stage 1.
If you want to play a card as a conquest, you must spend the appropriate amount of resolve.
If you want to steel your resolve so that it is divided into smaller chunks, you must play a card as a peril.
Those first 2 stages are part of the same decision. Does that make help clarify?