Pictures: Books for the very young are often written so that the picture will match the text exactly. Children learn to use the picture as a clue to what is written.
Letter Sounds: Sounding out the letters of a word can be a useful strategy when the word is spelt exactly the way it sounds.
Letter blends: The reader knows that when certain letters are put together, they make a certain sound. eg ch and ur as in church - a child who knows these sounds and letter blends, will be able to work out what the word says, even if they have never seen it before.
Flow of language: children who are exposed to lots of language, know it must sound a certain way, and so can often guess what text says by using this knowledge.
Prediction: A natural sense of "what comes next?" that has been developed by previous experience.