posted on 06-06-2019

Unconditional Probability

Updated October 1, 2019

What is Unconditional Probability?

Unconditional probability refers to the chance that a particular event will occur without regard to external circumstances.

How Does Unconditional Probability Work?

The outcome of a single event can be affected by any number of accompanying conditions. Unconditional probability is the likelihood that an event will end with a specific result irrespective of other conditions that may be present.

Unconditional probability is calculated by dividing the instances of a definite outcome by the total number of events. For example, if a die lands on the number five 15 times out of 60 , the unconditional probability of landing on the number five is 25% (15 outcomes /60 total lots = 0.25).

Why Does Unconditional Probability Matter?

Unconditional probability calculates the likelihood you'll get a particular outcome even if you can't know what specific external conditions exist. Traders use unconditional probability to gauge the eventual profitability of a security.