Daily horoscopes work through use of the Barnum effect, which uses broad descriptions and vague generalizations that could apply to everyone reading them, states University College London psychology professor Adrian Furnham. Such forecasts gain validity because they are personalized by date of birth, yet relevant to all viewers.
Named for Phineas Taylor Barnum of the Barnum and Bailey Circus, the Barnum Effect uses psychology to play on the tendency of people to believe certain positive statements about themselves. Since most everyone values their family and friends greatly, the statement "your friends and family are important to you" leads horoscope readers to believe the words are made specifically for them, relative to their birth date.
This same effect is found in fortune cookies where the Barnum Effect plays on the idea that most individuals accept positive words in reference to themselves when from a reliable or important source; simply because the person wants them to be true. Since persons want to hear they are on the right path in their lives and destined for greatness - especially in the most trying of times - words inspiring positive feelings are valued greatly by their intended audience, whether they may be valid or not.