I don't think it's as simple as knowing when to take a verse literally or symbolically. I will attempt to propose a hermeneutical approach to the translation of the book of Revelation. I am going to approach the text from a Christian perspective (as this was the intended audience). I would not call these 'rules,' but rather 'principles' of interpretation that I believe are helpful for understanding the book of Revelation. I will attempt to explain the basis and applicability of these principles by applying them to the larger corpus in which the book of Revelation occurs, the Old and New Testaments of the Christian bible.
Literary Motif & Bias
Just as systematic theology all begins with an organizing motif, many begin their study of the book of Revelation with a theological bias. For instance, Martin Luther's theological motif was justification by grace through faith alone, while John Calvin's was the glory and sovereignty of God. Their respective theological stances developed in different directions as a result. The literary motif with which we approach a work is a bias which taints how we interpret it.
The literary motif that most Western Christians bring to the text is the primacy of the millennium and its role in understanding the events of the rest of the book (Revelation 20:1-6). Even though the millennium is only mentioned in six verses of the entire book, it has become the organizing principle for most Western Christian interpretations of the text (and for Western Christian eschatology in general). I believe the first step to minimizing the impact of our biases when interpreting Revelation is to lay aside our literary motifs and even our insistence that the book describes the "end of the world."
Another factor that introduces bias in our interpretation is language. The book of Revelation was originally written in Koine Greek in the first-century. Many cultural references and linguistic connections are lost on modern readers. But even more simple than the language of the book itself is the language we use to describe it. We call it the book of Revelation, a translation of the Greek word ἀποκάλυψις (apocalypsis), literally meaning "uncovering" (or "revealing," hence "revelation"). This carried the linguistic connotation of uncovering a bride's veil (prior to marital sexual union) and was also a euphemism for disclosing hidden things. It is no coincidence that this word was used and that Revelation describes the marriage banquet of the Groom (Christ) and his Bride (the Church). Today we generally associate the words "Revelation" and "apocalypse" with the "end of the world" rather than with the uncovering of something once concealed. These linguistic associations themselves can bias our approach to the text.
Two additional biases that will color our perception of the book of Revelation include our understanding of God's covenantal relationship with his people throughout history and what that looks like today - specifically concerning Israel. The bible contains a grand narrative of which Revelation shows the potential climax. How we understand the narrative prior to approaching Revelation will taint how we interpret it. Views such as two-covenant theology or dispensationalism will affect our interpretation. Whether we are Christian Zionists or not will also significantly impact our approach to biblical prophecies concerning both Israel and the Church. These biases must be acknowledged on both sides of the fence - Revelation teaches neither. We bring these biases to the text.
Genre, Authorship, & Audience
The book of Revelation belongs to a genre known as apocalyptic literature, but I will refer to it as prophetic-apocalyptic literature since this book also appears to predict future events. It is reported to have been written by the apostle John. Thus it is important to be familiar with St. John's writing style and with other works of prophetic and apocalyptic literature when interpreting Revelation. Understanding how St. John uses various words and phrases in his other works can shed light on how he is using them in Revelation. Being familiar with apocalyptic literature which likely influenced St. John is also helpful when interpreting his book. Thankfully, we have other such examples throughout the biblical text with which St. John would have undoubtedly been familiar. Apocalyptic literature was a familiar genre to many first-century Jews; readers would have some idea of how it should be interpreted. We also need to keep in mind that the book of Revelation was written to seven specific churches in Asia Minor. We must also seek to understand these original hearers.
Gematria was familiar to most first-century Jews. It is a system for assigning a numerical value to words or phrases. When dealing with apocalyptic literature, numbers hold a symbolic meaning. We can see this principle in play in several Old Testament writings such as Jeremiah, who predicted that the Babylonian captivity would last 70 years (Jeremiah 29:10). The prophet Daniel lived during this captivity and came to the realization that this 70-year period was almost complete (Daniel 9:2). But there's one small problem: scholars have repeatedly demonstrated that it couldn't have been exactly 70 years that passed between Jeremiah's prophecy and Daniel's realization of its fulfillment. Some have tried to "make it work," but even ardent literalists such as Dr. John F. Walvoord have acknowledged that it doesn't quite work out to exactly 70 years (regardless of inclusive or exclusive counting schemas or whether or not you use a lunar or solar calendar). Even still, Daniel and the Jews saw this as the fulfillment of Jeremiah's prophecy. The number 70 indicated the completion of God's punishment of Israel and this symbolic meaning trumped its empirical value. We can even see this in the New Testament where Matthew ordered his genealogical accounts around the number 14 (cf. Matthew 1:17; he excludes some relatives in order to fit this pattern). The principle here is that we shouldn't try to impose our scientific precision on numbers that we encounter in biblical prophecy and apocalyptic literature.
Historical Events Themselves Can Be Prophetic
One such case is the child prophesied about by Isaiah who would be born of a young woman and called "Immanuel" (Isaiah 7:14). The fulfillment of this passage occurred in Isaiah 8:3. The child's name was "Maher-shalal-hash-baz." Christians later applied this prophecy to Jesus, however (Matthew 1:22-23). Early Christian fathers made all sorts of allegorical connections between Old Testament historical events and New Covenant practices. The book of Hebrews also makes many such allusions. Some also refer to this as an example of "double fulfillment."
Apocalyptic Visions Can Have Multiple Meanings
One need look no further than the book of Revelation itself for an example of this:
And he carried me away in the Spirit into a wilderness, and I saw a
woman sitting on a scarlet beast that was full of blasphemous names,
and it had seven heads and ten horns.... This calls for a mind with
wisdom: the seven heads are seven mountains on which the woman is
seated; they are also seven kings, five of whom have fallen, one is,
the other has not yet come, and when he does come he must remain only
a little while (Revelation 17:3, 9-10, ESV).
The seven heads are both mountains (or hills) and kings. It carries both meanings. The same may be true of entire cycles of events as well.
The opposite can also be true (multiple visions can have the same meaning). Joseph has two prophetic dreams but they describe the same event (that his brothers will one day bow before him) in varying details (Genesis 37:5-11). The same occurs when Joseph is interpreting the Pharaoah's multiple dreams (Genesis 41). Joseph explains that "The dreams of Pharaoh are one," and goes so far as to say that the duplication of the message with different dreams has significance: "And the doubling of Pharaoh's dream means that the thing is fixed by God, and God will shortly bring it about" (Genesis 41:25, 32, ESV).
Heavenly Disturbances Are Symbolic
The prophet Isaiah predicted the following:
Behold, the day of the LORD comes, cruel, with wrath and fierce
anger, to make the land a desolation and to destroy its sinners
from it. For the stars of the heavens and their constellations will
not give their light; the sun will be dark at its rising, and the
moon will not shed its light. I will punish the world for its evil,
and the wicked for their iniquity; I will put an end to the pomp of
the arrogant, and lay low the pompous pride of the ruthless. I will
make people more rare than fine gold, and mankind than the gold of
Ophir. Therefore I will make the heavens tremble, and the earth
will be shaken out of its place, at the wrath of the LORD of hosts
in the day of his fierce anger (Isaiah 13:9-13, ESV).
Was he talking about the end of the world? Nope. This prophecy was fulfilled when the Medes destroyed Babylon in 539 B.C. How can I be so sure? I only need to look a few verses ahead:
Behold, I am stirring up the Medes against them, who have no regard
for silver and do not delight in gold. Their bows will slaughter
the young men; they will have no mercy on the fruit of the womb;
their eyes will not pity children. And Babylon, the glory of
kingdoms, the splendor and pomp of the Chaldeans, will be like
Sodom and Gomorrah when God overthrew them (Isaiah 13:17-19, ESV).
This happens repeatedly in prophetic literature. Additional examples include Isaiah 34:4-10 which says that "All the host of heaven shall rot away, and the skies roll up like a scroll...." This prophecy was fulfilled by the destruction of Edom in the 6th century B.C. (and yet we still have stars in the sky). Ezekiel does this when prophesying the downfall of the Egyptian Pharaoh (32:7-8). Nahum says that "The mountains quake before him [and] the hills melt" when pronouncing judgment on Ninevah. (Nahum 1:5). St. Peter preaches the fulfillment of Joel 2 on the day of Pentecost, specifically citing the part about the sun being turned to darkness and the moon to blood (Joel 2:30-31; Acts 2:16-21).
Look for God in the Clouds
One of the most important symbols that shows up in the prophecies of Jesus himself as well as in the writings of St. John in the book of Revelation is clouds. Sometimes the clouds are purely symbolic, often of God's divine judgment, such as in Psalm 104:3 ("he makes the clouds his chariot"). Isaiah 19:1 prophesies, "Behold, the LORD is riding on a swift cloud and comes to Egypt; and the idols of Egypt will tremble at his presence, and the heart of the Egyptians will melt within them" (Isaiah 19:1, ESV). This was fulfilled when Assyria defeated Egypt (Isaiah 20:1-6). Ezekiel uses similar imagery in his prophecy against Egypt (Ezekiel 30:3).
But they aren't always symbolic. The LORD descended to his people in the cloud in Exodus 34:5. He appeared in the cloud upon the mercy seat in Leviticus 16:2. A cloud physically represented God's glory when it filled Solomon's temple (1 Kings 8:10-11). A cloud overshadowed Jesus, Peter, James and John on the Mount of Transfiguration (Matthew 17:1-13). Finally, Jesus goes up to heaven in a cloud in his Ascension (Acts 1:9). Most importantly we are told that he will return in the same way.
I won't say anymore in this section lest I sway the reader with my own interpretive biases.
Chronology is usually nonlinear in apocalyptic literature (especially in dreams and visions). Sometimes the order is designed to emphasize something. This can be seen in the presentation of many prophecies in the Old Testament, which sometimes are out of chronological order. For instance, in Isaiah 2 we first see the blessings of God's kingdom and global peace. But then immediately after we see that judgment is coming upon Israel before this can take place. Chronologically the peace must come after the judgment, but it is not always presented in chronological order.
The Worship Connection
The connection of Revelation to the historic worship practices of Jews and early Christians is largely lost on Protestant Christians. Roman Catholic and Eastern Orthodox theologians have retained many of these views, some going so far as to assert that Revelation is unintelligible apart from the liturgy of the Church (indeed some believe that Revelation's primary purpose was to prophesy the destruction of Jerusalem and the temple - representing the old system of worship - and to show the heavenly pattern of worship that the Church should mimic in order to worship in spirit and in truth). I highly recommend The Lamb's Supper: The Mass as Heaven on Earth by Scott Hahn for a concise presentation of this perspective on the book of Revelation (it is from a Roman Catholic viewpoint but I believe it is an enlightening perspective for all Christians). Even a cursory glance at the book of Revelation shows a pattern of heavenly worship that would have appeared familiar to first-century Jews - with some important and prophetic changes. Present in the book of Revelation is an altar, priests, vestments, lamp stands (Menorahs), incense, the scriptures (book or scroll), and praise and worship. The book of Hebrews also elaborates on this in depth.
Jesus is the Eschaton
Eschatology is a just fancy word referring to the study of the "last things." The word for "last" in Greek that forms the root of this word is the same word Jesus applies to himself in Revelation: "I am the Alpha and the Omega, the first and the last [(ὁ ἔσχατος)], the beginning and the end" (Revelation 22:13, ESV, emphasis mine). He is making all things new (Revelation 21:5). Understanding Jesus is essential to understanding Revelation. Jesus is the one who reveals. He is the Lamb who was slain and who alone is worthy to open the seals (Revelation 5:5-6).
In conclusion, I feel that even these principles are incomplete as it is my opinion that this one book cannot effectively be approached in a vacuum apart from the revelation of God throughout the rest of the bible and Church history. But I offer them anyways. The book of Revelation is indeed revealing. It will either reveal to us whatever the apostle John (and God) wished to communicate or it will reveal our biases, prejudices, and neurotic anxieties.