I keep it simple. And some people will probably say that I stereotype... >.>
I was taught to go by preference of letters first.
1) I find out if the person is either an I/E, S/N, F/T, or J/P preference. I skip a set of letters if the person feels like they're both. For example I would leave the space blank if I knew the person was an ES_ J.
a) I do this by observing
b) And I do this by asking them questions
- I often know when someone is an Introverted Feeler by facial expressions
- Same for Extraverted Feeler
- Once I have those two things down I automatically cut out 8 other types. Ex: If the person is FP or TJ, they're introverted feelers. They just don't "emote" like a TP or FJ
Then if I'm stuck and I don't get an insight about the person that fits with a type, I look at the functions.
I use the functions as a way to double check everything. I don't primarily use them as a way of typing people though. I hate doing that. It takes much longer for me to get context for figuring out only their functions.
That's an extremely simplistic outline of the way I do it.
If I don't know the person, and it's only a matter of seconds. I use body language and facial expressions and I can usually figure out the last 2 letters.