Wash the deck with a pressure washer set at 2500 to 3000 psi. Work slowly over the entire deck to remove any dirt, debris and chipping paint. The pressure washer can put gouges in the deck, so watch your work and make sure you aren't putting too much pressure in one spot. Let the deck dry completely before proceeding.
Sand the deck using rough 60-grit sandpaper, and then move up to a medium grit paper like 80 or 100. You can use a palm sander on small decks, but a disc sander works better. Avoid renting large sanders designed for refinishing hardwood floors. Outdoor decks are too rough and uneven. The nails in the deck will rip the paper, and the deck won't sand evenly. Clean all of the dust off the deck before proceeding.
Scrape away any build-up between the deck boards using a paint scraper. This residue is only aesthetic, so if you want to leave it, you can. Some decks will have minimal residue, and you can skip this step.
Fix any parts of the deck that need repair. This includes pounding nails back down into the deck or replacing them as necessary. Look for damaged boards or boards that are starting to rot.
Stain the deck using a semi-transparent deck stain and a 4-inch bristle brush. Brush the stain on with the grain of the wood. Use even strokes, and overlap the stain so the edge of each stroke stays wet as you work to prevent streaks. Work on three or four boards at a time instead of painting one board from top to bottom. Move down the deck once those boards are finished. Allow the stain to dry completely according to the manufacturer's directions before use.