I continued shading and hatching, observing the light and dark on the horse's body. Be careful to observe the placement and shape of details accurately, but not to obsess about drawing them in detail - you want the handling of the whole surface to be fairly uniform. For example, the eye is a fairly simple dark shape with a highlight. Subtle shading under the chin, along the ridges of the face, nostrils and under the ears help to model the head without resorting to outline.
Use an EraserDon't be afraid to use an eraser when sketching. I've used the eraser over many areas of this drawing. You can 'reserve' or leave blank the highlight areas, but another option is to shade across them and then erase the highlight. I've used this method particularly across the middle of the barrel where there's some highlight, while still having some continuous rounded shading. The eraser also creates the reflected light inside the rear leg, and softens the edge of the chin. Try rough hatching strokes of the eraser, then hatching back across with the pencil to create a layered effect.
Finished! Why not try copying these steps with a different photographic reference. Compare the proportions, lighting and shaded lines in my example with the lighting in your photo. How do the proportions of your horse compare to this draft horse? Where are the shadows and planes? Have fun!