Well, in the free curriculum guide, Sonya recommends they do transcription with SW in 3rd grade for the first half of the book and then dictation for grade 4. I have not personally done it that way though. I just started him when I thought he was ready, and gradually. I think he was age 10 or close to age 10 when we started it. I do have concerns if they are learning the spelling as well with transcription as they do with dictation. It probably depends on the child. And you could let them know they need to be sure to know how to spell them. You could pull out some of the new words for them to work on more, and possibly test on those words once every week or two.
When we first started in grade 4, he would spend 3 days on one passage. And we got through 1 per week. Day 1 is to read and discuss and transcription copywork. Day 2 is to study the passage again and practice spelling words. Day 3 is dictation.
Here is how we now do dictation in grade 5, covering 2 per week:
Day 1, read the passage out loud to mom. Discuss meaning, grammar, etc. Pull out new words to work on for spelling. Write those words at the bottom of the page and he does copywork (transcription) and writes the spelling words three times each. This is all done on the left side of a 2 page spread of a spiral notebook.
Day 2, Study the passage and spelling words. When ready, give to mom for dictation on the right side of the 2 page spread in the spiral notebook with Day 1 work turned to the back. I do not check his work until he is finished, but he usually gets it right. It is too difficult if there are more than 3 new words to learn, or if they miss a lot on the dictation. I grade for capitals and punctuations too. If he misses a spelling, I put that word on the next spelling list to practice some more. I expect to give a decent amount at a time to him and not have to repeat myself much, because I expect him to be that familiar with it and to pay attention well. When we get to longer exercises, I will give dictation on only part of it, but expect him to be prepared for all of it. And some will use the computer so the student can type it.