1. Start the game.
2. If you are currently on a patrol, select Single Missions. It doesn't matter what the mission is, you're not going to load it anyway.
3. At the bottom, select Realism.
4. At the bottom left is Manual Targeting System. Make sure it's unchecked.
5. For more difficulty also uncheck Map Contact Updates. I don't consider this realistic, but since they update everything at once all the time it's not really realistic to have it on either. Your choice.
6. Save it and be done. It will change the options in your career as well.
If you're in between patrols you should be able to change it in the Career screen.