The water test is a very old test and can identify fakes printed on ink jet printers or similar, but it won’t identify any of the professional made fakes which are the main problem of today’s playerbase.

Basically it tells you to rub a bit with a wet cotton swab on the cards surface, if the ink goes off it is fake. Since most ink is water resistent, this test just does nothing to most fakes. Just check the card with a loupe, it will identify fakes far better than this test.