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Cold Readings are used by mediums and psychics to make you think they can read your mind, predict your future, see into your soul, etc. But a Cold Reading is just a parlor trick. To see how the trick is done, try the following links:

Cold Reads and More: How Fraudulent Mediums Obtained Information
Dead Man's Hand: Playing the Game of Cold-Reading
So, You Wanna Be a Psychic?
Guide to Cold Reading
Psychic Sophistry
Skeptic's Dictionary: Cold Reading
About.com: What Is Cold Reading?
The Rhetoric of Cold Reading
James Randi Educational Foundation
Cold Reading: The Tricks of the Psychics
The Cold Reading Technique
How Come TV Psychics Seem So Convincing?
Cold Reading: How to Read Someone's Mind
A Closer Look at Psychics
Psychic for a Day
John Edwards' Cold Reading Gig