Is there a design behind your character?
If you take Mario, he has a "box cover" design that can be done in any resolution you want:
...and then the pixel art version is a simplification or adaptation of that:
If you don't have a "box cover" design for that torch character and it only exists directly in pixel art mode, you'll have trouble understanding its
anatomy, like where are its limbs, joints etc.
To be able to animate that character doing a walk cycle you need to have a thorough understanding of its anatomy so you know how to define each pose of the walk cycle -- whatever that walk cycle might look like, not necessarily bipedal.
With that being said, there's some general pixel art and animation theory in this free e-book:
http://www.widgetworx.com/book/
EDIT: Some more resources.
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http://www.angryanimator.com/word/2010/11/26/tutorial-2-walk-cycle/
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http://www.awn.com/tooninstitute/lessonplan/lesson.htm
From reading about animation in general, a walk cycle is like an advanced task. In order to produce a convincing walk cycle the animator has already gone through several exercises, from the bouncing ball to the flour sack. If you want an excellent result then you'll have to practice and be patient. There won't be a shortcut here, it's about experience.