This is my first post so don't throw things at me

DS is an only so can't have the total experience of another child getting the extra attention that comes with learning to read BUT your dd seems to be ready to pre-read. Mine also started about 1 with pre-reading sounds for letters kind of thing.
By 2nd grade he was getting "caught" reading Moby Dick inside his Science book. (I'll have to make another post about how the teacher felt confused on how to reprimand a 6 year old for reading Herman Melville for fun.) Here is the kicker if your ds X2 and dd are just early love of reading readers in about 1st or 2nd grade there is going to be an interesting issue come up. DS as I said read and at a much higher level than his classmates but then came the standardized tests. He was off the chart on his reading comprehension but in the danger zone on nonsense words. Reason is, kids that start reading earlier build their sight word vocabulary far faster than those that are at stage readers so they are not getting this concept of made up words that mean nothing. Of course we were lucky in that his teacher knew this was the case and dismissed the test result as a negative indicator but knew that I needed to be aware that working on sounding out new words needed to be reiterated as the faster the advanced reader reads the more apt they are to know what the new word means based on the words and context it is in, but not really know how to properly pronounce it.
It annoys the bejeasus out of him but I try to have ds read aloud a few times a week so that I can work on pronunciation and check to make sure he is understanding the individual words that are new and not just getting the basic concept because of the context of that one reading.
Now just wait till they find out there are kids that do not like to read. LOL DS acted like he had discovered a Martian when he found out there were kids that don't like to read.
Editied to add DS loved workbooks too and they start out just kind of doing their own thing with them it really is at that age a "playing school" thing. I would like others have said not worry about if they are doing it the "right" way or in order. LEt her skip around to the things she finds interesting int eh book. We got the Giant Pre-K homeshool workbooks from SAMs. Wow seems so long ago now. DS is now 9