Quote:
Originally Posted by ERGOPHOBIA
any one want to tell me what this red line is supposed to say? I understand it is an ICM calculation of some sort?
Most simply stated, it is a partial adjustment to your profit line (green line) based on some measure of luck.
I like to think of it as removing a small amount of the noise (variance) from the green line so that it will resemble your true win rate more quickly than the raw results (over a smaller sample). Note that proper sample sizes are still needed to actually read anything into the red line, but the size is typically reduced a significant amount.
The adjustments are based on how lucky you were in all-in hands (something that can be reliably measured). Note that all other aspects of luck are ignored and hence the phrase "partial adjustment". To measure how "lucky" you were in an all-in hand, you compare how much equity you had in the hand to how much you actually won. When you get lucky and win more than the amount of equity you have in an all-in hand, the line is adjusted down. When you win less than that equity, the line is adjusted up.
ICM is used to convert chip equity to dollar equity since we are adjusting the green line, which is winnings in dollars.