Zain has explained it brilliantly and in detail, just to add to that even from the roof of your home you can distinguish (somewhat) between a star and a planet.
Stars twinkle and planets have a fixed light i.e. planets work with UPS and give you constant light whereas stars work without it and fluctuate with the volts.
To start with at sunrise first and at sunset the last BRIGHT star you see at the horizon is VENUS (which is actually a PLANET) and you will see it has a fixed light.
Zain, I am sure you can shed some more light on it.
Cheers,
Kaleem