If you imagine a scale from -100 to 100, if the market has moved up from 0 to 40, what is the probability is will continue to 100?
There is a 50-50 chance to move up or down from 0, but what is the probability of moving to 100 when it has already moved to 40?
This may be a simple question, but I am struggling! Can someone share the the algorithm that solves this problem?
Is the answer 70%, ie. if at 0 it is 50-50 to go up or down, if it moves to 40 there is 70% chance it will rise to 100 and a 30% chance it will not?