Smash Vegas

To win at poker you need to think in the correct terms. Here are some concepts you should be familiar with.

Fundamental Theorem of Poker

The fundamental theorem of poker (as stated by David Sklansky) says that you gain whenever you play your hand the way you would if you could see your opponents’ cards or your opponent plays his cards differently from the way he would if he could see your cards.

Deception

There are really only two types of deception in poker - playing a strong hand weakly or a weak hand strongly.  Both may be tried on a single betting round (e.g. check-raise) or over several (e.g. slowplaying).  In either case you are attempting to make your opponent(s) commit an error under the fundamental theorem.

Pot Odds

Pot odds are the ratio of the amount of money in the pot to the size of bet required to stay in the pot. It is only rational to call a bet if your chance of winning is better than your pot odds. Put simply, would you pay $1 for a 50/50 chance to win $1? Of course not. How about for a 50/50 chance to win $10? Yes please. It would be rational to play that game as soon as the prize is greater than $2.

A skilled player will manipulate the pot odds to induce mistakes in opponents.  Say you think your opponent has a 25% chance of making a flush, by betting an amount which forces him to contribute more than a quarter of the final pot you put him in a difficult situation.  If he calls then he is in error and if he folds then you benefit.

Implied Odds

Implied odds are a refinement of pot odds. They are pot odds, but instead of considering the current pot size we try to estimate the amount of money which will be in the pot at the end of the hand. Skilled players will use this concept. A common application is in even money situations. The pot odds may not currently be good enough but if we expect to get enough extra money in the pot in later rounds it may be rational to play.

Odds of Winning

This might sound obvious, but it’s important to have a good estimation of your probability of winning.  Usually when we talk about our odds of winning we mean our odds of winning a showdown - i.e. we don’t include the chance that everyone else will fold (see fold equity).  Some find it helpful to think of the strength of a hand as two components; the strength right now and the potential for the hand to improve.

Expected Value

Any action in poker will have an expected value, which is the amount you expect to win or lose by that action.  It is a long term average - think of it as “if I played this exact situation a million times, what would my average profit / loss be?”.  This is a very important concept because it is only rational to make choices which have a positive expected value.  In the pot odds example above our EVs would be -$0.5, +$4 and $0 respectively.  We should include all known information into our expected value estimation.  If we think we have a 50% chance of winning a showdown and also suspect our opponent will fold 25% of the time then that will obviously increase our EV.

Pot Equity

Your equity in the pot is simply your probability of winning multiplied by the size of the pot.  Think of it as your “share in the pot” (note that the size of your share has nothing to do with how much of it you put in).  It is possible to contribute negative equity, for example when you contribute to a pot and your chance of winning is less than 1/(number of people in the pot).  This is not to be confused with negative expected value.  You can be correct to play (have +EV) but be contributing negative equity.  It is more a sign that you should attempt to continue cheaply, as the extra money you are contributing (unless it is inducing opponents to fold) is not benefitting you.

Fold Equity

Following on from above your fold equity is the equity you can expect to gain by your opponent(s) folding.  There is a subtlety to this concept which is particularly important when playing short stacked in a no-limit game.  A short stacked player will go all in when they have good hole cards.  A significant portion of their advantage can be because of fold equity, but this fold equity will diminish if their bet size is not sufficient to put other players off the hand.  This is an example of manipulating pot odds.