It's actually fairly straight forward. You start from whichever letter in the alphabet you want but there's no going back. So if you start with Steven Gerrard , you can only go from G-Z after that, and it has to be in alphabetical order. You can go from G to M if you wish, but you can't then go back to I, for example. You can go from G to another G if it follows the alphabet. For example Gerrard to Guardiola is perfectly fine because 'Gu' comes after 'Ge'.
You can only use the names they went by during their career for guys like Pele, Ronaldo etc. Any other pick is chosen by surname.