"We've got something for everyone," said P. T. Barnum. His knack for creating shows with a broad appeal inspired the name of this effect, also called "The Forer Effect" and "The Personal Validation Fallacy." This bias provides a partial explanation for the widespread acceptance of some pseudosciences such as astrology and fortune telling, as well as many types of personality tests. Cunning psychics take advantage of this effect because it enables them to pitch generalized statements and feel confident that many people will apply them to themselves and believe they are specific.
So successful psychics are crafty, talented generalizers. They toss out fabricated information about you rapidly until something sticks, until they see a glimmer in your eye and excitement in our demeanor. They read your body language then expand on the topics that cause you to react. They are reaction readers.
BrainTip: You, too, can become a psychic. Just read, study and practice the information in the little booklet, Learn To Be A Psychic In 10 Easy Lessons!, a free pdf download from Skeptic.com.