One of the most important aspects of driving is your observation, if you don't see it you can't respond to it. So what should you be watching?
When in the car as a Pre-Learner or Learner as the passenger why not start learning and practice some important skills in a fun way that develops a natural skill? Pick a car ahead of you and see if you can guess what they're going to do BEFORE they even signal their intent.
The lights on the rear of the car in front of you are there to warn you what they are doing/planning on doing. When they start indicating you can predict what is coming, the car will drift over the same side as the indicator, slow down and maybe stop (depending on traffic). Finally they will turn in the direction of the indication. You'll see these same behaviours in a car that has failed to indicate, a lot of the time you can predict what a car is about to do before they even signal their intent.
Once you've recognised they are turning you should check your mirrors, especially for bikes, and start to slow down. If clear, check the road markings to see if you are allowed to cross them, if so drift slightly over the line in preparation to pass them whilst re-checking for oncoming traffic; then if safe to do so pass the turning vehicle.
The other lights to watch for are the Brake Lights, simply put, when these go on the car in front is slowing down.
Your response to this should be to check your mirrors and ... wait for it ... slow down. While it does sound so obvious and simple, you'll be amazed how often people don't seem to get this one.
Look Far Ahead
The best and safest drivers look far ahead, they will manoeuvre the car so they can see through other car windows or around the car altogether. They are looking for what the cars two or three spaces ahead are doing. When they see brake lights come on up there, these drivers know that every car in front of them will be doing the same. They'll check their mirrors and come off the accelerator, these drivers don't usually need to brake as often as others because they will lose speed naturally in advance of the upcoming hazard because they saw it coming.
These drivers will see the traffic lights ahead and have a rough idea of what colour they will be when they get there and they will adjust their driving accordingly. You'll spot these ones because they seem to slow down for no apparent reason, but if you look ahead you might just see a red light. In time these drivers get used to the length of different lights and will usually just roll up as they turn green.
All that said DON'T trust that an indicator definitely means they are turning that way, don't assume that a Green Light means everyone has stopped for their Red Light. Always keep watch, always check one last time.
Keep Your Eyes Moving
Don't just look straight at the car in front of you, you should ALWAYS be scanning around you and up ahead (as seen above). To the side of the road you'll find the traffic control signs like Speed signs, Give Way signs, Parking restriction zones. You'll also see other potential hazards like children and animals, adults approaching crossings, parked vehicles trying to pull into the traffic. As you SCAN across the road you'll notice road markings like bike lanes, other vehicles that were hidden before like motorbikes, checking in your mirror you'll know what traffic is behind and around you. Keeping your eyes scanning back and forth across the road will also keep you peripheral vision open nice and wide, it will also keep your mind actively watching and looking for things. Anything out of the ordinary will catch your attention quickly and help avoid a potential collision.
This will all also help you to always have an idea of what vehicles are around you. When something bad does occur you'll already know if you can brake heavily and/or change lanes to avoid a collision. It's still a good idea to perform your customary shoulder check, just to be sure, but most of the time you'll already know.
For a more indepth look at Observation check out the Advanced Observation page