I want to know the correct procedure to perform the prayer of istikhara and is it advisable to do so before a marriage proposal or before making some important decision in your life. How can one interpret the Ishtikhara dream and is it okay to follow the opposite after the Istikhara? Is it okay to avoid Istikhara dua in order to avoid confusion and keep your mind clear of doubts?
AOA
I don’t know your religious background, but here is the answer per the Quran and authentic sunnah of our Prophet saw.
The istikhara or to ask for Allah’s advice and guidance. The prophet saw taught this act to the believers and is meant to be a source of guidance for his ummah for all matters except matters of ibadah of Allah swt directly (fardh prayer, fasting). Istikhara should be made for E.g. to start a new business, to get engaged, and yest to get married etc.
For any act to be acceptable to Allah swt it is desired to have it as close as to the sunnah of the prophet saw as possible. Don’t you think that when asking Allah swt for his advice it is better to ask Him in the way of His most beloved slave and prophet Muhammad saw? I am sure you will agree. Hence, the dua is an essential part of the act as well as 2 rakah nafl prayer. If the person cannot recite the dua in arabic they should say the translation in their language to fulfil the sunnah .
The dua was taught by the prophet saw and it should clear the persons mind and not confuse it since the true sunnah of the prophet saw never confuses once it is clearly understood.
However, I would like to mention that there a stigma in pakistan and india that there is the factor of a “dream” associated with fulfillment of the istikhara. Really, there is no condition of a dream. The objective to carryout istikhara is not to be guided with a dream, rather to have a guidance and protection from harmful action that are not appearing to be harmful through the hidden help of Allah swt. Look at the words of the dua and you will see that in it we ask for Him to make a good action easy for and a harmful one to be driven away from us and replaced with a good one (of blessing).
The procedure is simple.
Pray any 2 rakah other than the obligatory prayers. After that make the dua of istikahra. In it think of the matter clearly you want to act on. choose one option for clarity of thought. Don’t confuse yourself in the dua by thinking many things at one time. Then start your efforts to carryout the item. It is considered preferable to wait a bit to have some guidance of mind and heart. Or as people prefer, go to sleep. In the morning start what you wanted to do. If it is good for your worldly and afterlife then it will inshallah become easy for you. And if it difficult or seems impossible then it is from Allah swt that He did not make it easy for you.
It is well known that the pious predecessors beleived that “the one who takes shura or advice or fellow believers and the one who make istikhara will never feel regret”. Allah swt put peace and contentment in the heart of the believer sine he or she chose the right way to decide.
Here is a copy of the dua. 
Also.
Here is a very good explanation.
May Allah swt guide you!
I know this is a good thing, but I advise not to do it, as you will be very confused if you have had the 'dream' or 'sign' and then you will go into panic mode.
I know ppl that have done this and then not been able to interpret it and then they got depressed afterwards.
God forgive me if i am saying something wrong.
If this is for a rishta, then nothing is guaranteed in life, relationships are made from trust and love. Ask people about the characteristics of the family etc
good luck
On 2nd thoughts do the isthikhara and pray whatever will happen may it be for the best and that you leave the rest in the Almighty's hands. I don't want to say don't do something that our beloved Prophet recommended, I am jsut talking from experience of what i Have seen, and I am not strong willed to do it.
As the people that used to do it were very islamic and I think they understood the signs better, sorry I am going on and on.
Re: The prayer of Istikhara
mrsshy, Isthikhara has an important role in Islam. And no it does not cause confusion. It's encouraged. Religion is not a matter of what we think. It's what has been revealed through Quran and Sunnah.
The description of Salaat al-Istikhaarah was reported by Jaabir ibn ‘Abd-Allaah al-Salami (may Allaah be pleased with him) who said:
“The Messenger of Allaah (peace and blessings of Allaah be upon him) used to teach his companions to make istikhaarah in all things, just as he used to teach them soorahs from the Qur’aan. He said: ‘If any one of you is concerned about a decision he has to make, then let him pray two rak’ahs of non-obligatory prayer, then say: Allaahumma inni astakheeruka bi ‘ilmika wa astaqdiruka bi qudratika wa as’aluka min fadlika, fa innaka taqdiru wa laa aqdir, wa ta’lamu wa laa a’lam, wa anta ‘allaam al-ghuyoob. Allaahumma fa in kunta ta’lamu haadha’l-amra (then the matter should be mentioned by name) khayran li fi ‘aajil amri wa aajilihi (or: fi deeni wa ma’aashi wa ‘aaqibati amri) faqdurhu li wa yassirhu li thumma baarik li fihi. Allaahumma wa in kunta ta’lamu annahu sharrun li fi deeni wa ma’aashi wa ‘aaqibati amri (or: fi ‘aajili amri wa aajilihi) fasrifni ‘anhu [wasrafhu ‘anni] waqdur li al-khayr haythu kaana thumma radini bihi (O Allaah, I seek Your guidance [in making a choice] by virtue of Your knowledge, and I seek ability by virtue of Your power, and I ask You of Your great bounty. You have power, I have none. And You know, I know not. You are the Knower of hidden things. O Allaah, if in Your knowledge, this matter (then it should be mentioned by name) is good for me both in this world and in the Hereafter (or: in my religion, my livelihood and my affairs), then ordain it for me, make it easy for me, and bless it for me. And if in Your knowledge it is bad for me and for my religion, my livelihood and my affairs (or: for me both in this world and the next), then turn me away from it, [and turn it away from me], and ordain for me the good wherever it may be and make me pleased with it.”
(Reported by al-Bukhaari, 6841; similar reports are also recorded by al-Tirmidhi, al-Nisaa’i, Abu Dawood, Ibn Maajah and Ahmad).
Re: The prayer of Istikhara
Just remember that it's not necessary that you will see something in a dream afterwards.. but it's recommended to pray the 2 nafl and then recite the dua-e-istikhara with your full focus and attention before going to bed.. and then inshaAllah you will feel more at peace over whatever the issue is, and Allah will guide you towards the direction that is best for you. the dua itself is really beautiful, so simple and humble.
and yes, it will help clear your doubts and have a better perspective.
edit: btw, its recommended to recite Surah Al-Kafirun in the first rakah, and Surah Al-Ikhlas in the second.