I enjoy seeing magic tricks and this is a good one. As always, the fun part is to speculate on how they are done.
Teller (of Penn & Teller) describes some of the techniques that magicians use to fool audiences. Magicians are experts at understanding the nature of sensory perception. One of the things they are able to do is to make the audience lie to themselves. This is how psychics and other charlatans work. They use various techniques to get information from their customers who later will swear that the information they received was produced cold and that they did not reveal anything at all or that there was even any prior conversation.
As Teller says,
Magic is an art, as capable of beauty as music, painting or poetry. But the core of every trick is a cold, cognitive experiment in perception: Does the trick fool the audience? A magician’s data sample spans centuries, and his experiments have been replicated often enough to constitute near-certainty.
In this interview with Adam Savage, the other half of Penn & Teller explains how they got an improvisational actor, with minimal training, to successfully read the minds of people and she was so successful that some of the people whose minds she ‘read’ broke down in tears at what they were told.
So are these mind readers all crooks and phonies? In an interview with David Frost, Orson Welles describes what he learned from retired ‘mind readers’ about how they plied their craft and how he used that knowledge to create a very short career (just one day in fact) as a mind reader. He said that the mind readers he spoke to have a phrase (“Becoming a shut eye”) for those mind readers who start to believe that they have real psychic powers and not that they have utilized certain observational and conversational techniques.