Here is the Total Defense Rule from book v1.34:

A Character can choose to go into a “Total Defense” mode during combat, by hunkering down, parrying or dodging, which means they forfeit any movement or attack for that combat Melee, but get a +2 AC added to their current Armor Class.

As an additional point about this, Total Defense is declared as the Character's Combat Phase action. This means that if you have lost the Initiative then you can not use Total Defense before the opponent has a chance to attack. However, if you used Total Defense in the prior melee, then you can continue to use it into the next melee, whether you won the initiative or not. Your Character is simply continuing to hunker down beneath his shield, or dodge or whatnot. But to use Total Defense the first time requires that you win the Initiative.