Help with Japanese distance words...?

Can someone give me a guideline for when to use the words for close to me and further away. Examples of words are: sore and are, sono and ano, soko and asoko, etc. When would I use the close one and the further one? I realize I would use close when, say, I am holding a pencil and would use further when I'm talking about a building 2 blocks away, but what about in between? What is there is a stop sign right outside my car window? This is really confusing me! lol Please help! arigatou gozaimasu!