Water baptism is one of the sacraments the Lord Jesus commands the church to perform. A sacrament simply means a physical ceremony with a spiritual significance.

By the sacrament of water baptism, we are demonstrating our identification with the ;
 Death
 Burial and
 Resurrection of Jesus Christ.

The bible says;
Therefore we are buried with him by baptism into DEATH: like as Christ was raised up from the dead by the glory of the Father , even so we also should walk in the newness of life. Romans 6:4.

Already at the new birth, our spirit man was recreated in righteousness and true holiness. (Ephesians 4:24). The bible says that if any man be in Christ, he is a new creation; old things have passed away, and behold, all things have become new. (2 Corinthians 5:17).
This is the experience of the inward man, which is the human spirit. There is an inward man and an outward man. We are recreated in our inward man (2 Corinthians 4:16). At the new birth, we receive the God-kind of life into our spirit, having been crucified, dead, and resurrected with Christ Jesus.
However, what the new birth is to the inward man is what water baptism is to the outward man.
The new birth is the baptism of the human spirit into Christ by the Holy Spirit. The bible says;
For by one Spirit are we all baptised into one body.
1 Corinthians 12:13.
Water baptism, therefore, is an outward demonstration of what has happened to the inward man. The amplified bible says;
And baptism, which is a figure (of their deliverance), does now also save you (from inward questionings and fears), not by the removing of outward boy filth (bathing), but by (providing you with) the answer of a good and clear conscience (inward cleanness and peace) before God, ( because you are demonstrating what you believe to be yours through the resurrection of Jesus Christ.
1 Peter3:20.
Through water baptism, we demonstrate what we believe to be ours through the resurrection of Jesus Christ: the new life.
As stated earlier, it signifies our total identification with the death, burial and resurrection of Jesus Christ.