What is 'Subjective Probability'
Subjective probability is a type of probability derived from an individual's personal judgment about whether a specific outcome is likely to occur. It contains no formal calculations and only reflects the subject's opinions and past experience. Subjective probabilities differ from person to person, and contains a high degree of personal bias.
BREAKING DOWN 'Subjective Probability'
An example of subjective probability is asking New York Yankees fans, before the baseball season starts, about the chances of New York winning the World Series. While there is no absolute mathematical proof behind the answer to the example, fans might still reply in actual percentage terms, such as the Yankees having a 25% chance of winning the World Series.
Subjective probability is highly flexible, even in terms of one individual’s belief. While an individual may believe the chance of a specified event occurring is 25%, they could have a different belief when given a specific range from which to choose, such as 25% to 30%. This can occur even if no additional hard data is behind the change.
Understanding Probability
The probability of an event is based on the likelihood of that event occurring. In most forms of probability, quantitative information is gathered and interpreted to help determine this likelihood through a mathematical mechanism, normally relating to the mathematical field of statistics. The percentage chance of a flipped coin landing on heads or tails can be interpreted as a probability, expressed as a 50% chance that it will land heads up, and a 50% chance it will land tails up.
Examples of Events That May Alter Subjective Probability
Subjective probability can be affected by a variety of personal beliefs held by an individual. These could relate back to upbringing as well as other events the person has witnessed throughout his life. Even if the individual’s belief can be rationally explained, it does not make the prediction an actual fact. It is often based on how each individual interprets the information presented to him.
Examples of Subjective Probability
In a scenario in which a person is asked to predict the percentage chance of whether a flipped coin will land with heads or tails up, his initial response may be the mathematically true 50%. If 10 coin flips occur, all resulting in the coin landing tails up, the person may change his percentage chance to a number other than 50%, such as saying the chance of it landing tails up is 75%. Even knowing that the new prediction is mathematically inaccurate, the individual’s personal experience of the previous 10 coin flips has created a situation in which he chooses to use subjective probability.

Objective Probability
Objective probability is the probability that an event will occur ... 
Compound Probability
Compound probability is a mathematical term relating to the likeliness ... 
Prior Probability
A prior probability, in Bayesian statistical inference, is the ... 
Joint Probability
A joint probability is a statistical measure that calculates ... 
Unconditional Probability
An unconditional probability is the independent chance that a ... 
Binomial Distribution
The binomial distribution is a probability distribution that ...

Investing
Financial Forecasting: The Bayesian Method
This method can help refine probability estimates using an intuitive process. 
Investing
What Are The Odds Of Scoring A Winning Trade?
Just because you're on a winning streak doesn't mean you're a skilled trader. Find out why. 
Investing
Explaining Expected Return
The expected return is a tool used to determine whether or not an investment has a positive or negative average net outcome. 
Investing
There Are More Ways to Invest in Land Than You Think
You don't have to have a huge amount of capital to invest in land. You have many other options, including landrelated ETFs and ETNs. 
Financial Advisor
Don't Let Fear of Losing Keep You Out of Stocks
Even if your odds of making money are 50/50, an occasional loss can convince you to avoid future risks. But often that loss heralds a good time to invest. 
Managing Wealth
Anticipate Trends to Find Profits
Monitoring your trades in real time can help you anticipate their outcomes. 
Investing
The Difference Between Investing and Speculating
The difference between investing and speculating may surprise you. 
Investing
9 Cognitive Biases That Affect Your Business
Human beings often act irrationally when it comes to business decisions. Behavioral finance explains the difference between what we should do and what we do. 
Trading
4 World Events That Could Impact Your Currency Trading Strategy (DB)
There are a handful of upcoming major events that could flip the entire foreign exchange market on its head.