As the pan heats up, we'll add about 1/8 of a teaspoon of water every 10 to 15 seconds. As you can see, if the pan is cold, the water won't do anything. But as the pan heats up, the water will start to steam and then eventually bubble.
As it continues to heat, it will steam and bubble even quicker. Soon the bubbles will start to evaporate as soon as the water hits the pan. Eventually, when the water is added, it starts to evaporate and disperse in the smaller beads of water.
As the pan nears the proper temperature, it will start to form a ball, almost like a mercury ball that floats on the surface. If there are still many smaller balls, wipe the pan dry, wait a few more seconds, and try again.
When the pan is at the proper temperature, the mercury-like ball will form almost immediately with no or very few other smaller balls of water. This means the pan is ready for the oil and sticking will not occur, because like the mercury ball, the food will glide along the surface of the oil.
If the water spurts immediately and disperses quickly like this, this is an indicator that the pan is too hot. Allow the pan to cool slightly, and then continue with the water test until you reach the mercury ball stage. As soon as you reach this stage, your pan is at the perfect temperature to proceed.
However, the pan will overheat very quickly so it's essential that you're ready with the oil and food. This is one of the main reasons why mise en place is so important when cooking.