Quote:
Originally Posted by statmanhal
The suggested link presents a very nice definition of Pot Odds with examples and tables – namely Pot Odds are the size of the pot (the reward) divided by the amount you have to bet (the risk). This is the conventional definition.
What may be the source of OP’s confusion is that you sometimes see something like the following definition:
Pot Odds = Bet Risk / Total Amount to be Won,
which actually represents the minimum equity you need for a call or bet to be +EV.
A major poker site has this definition in at least one of its poker strategy articles. Here is the quote: “To work out pot odds, we must divide the amount of money we are risking (by calling or betting) by the total amount we can win (including the amount we risk).”
I can easily see how beginners can be confused by such unnecessary departures from convention.
This was terribly confusing to me early on, so I stopped using pot odds altogether and just started using EV. to help visualize it, I would conised a game of heads or tails, and model my calculations based on that, since it is very easy to visualize that without doing a lot of math.
There are a few ways to calculate EV, but they amount the the same once you do the math.
Some do it as
EV = sum of (probability of outcome)*(net value of outcome)
I do it as
EV = sum of (probability of outcome)*(total value of outcome) - cost of action.
Consider a coin flip game. There is $20 in the pot. You have to place a bet of $10 and then call heads or tails. If you win, you keep your $10 and win $20. If you lose, you win nothing, and have to pay $10. The coin is honest, so you have 50% of winning
Using pot odds, you need $10 to win $20, so you are getting pot odds of 2 to one. Your actual odds are 1 to 1, so you have sufficient odds to call, as your actual odds are lower than your pot odds.
Using EV (the first method I describe)
EV = (odds of winning)*(how much you win) - (odds of losing) * (how much you lose)
EV = .5*20-.5*10=5
So if you do this bet 1000 times, you can expect to earn an average of $5 per bet.
Using my preferred method
EV = (probability of guessing right)*(how much total you get for being right) + (probability of guessing wrong)*(how much you get for being wrong) - total cost
(I think I like this method better because of my background in business. It is just easier for me to visualize)
EV = (.5)($30) + (.5)($0) - $10 = $5
using EV is superior as it allows you to model multiple outcomes. Let's say you are on the turn. You are on a flush draw, so you have about 20% chance of hitting your draw. You also know that if you bet all in, you estimate that 50% of the time, villain folds. Using pot odds or equity, you can't easily calculate whether or not a shove is a profitable move. Using EV, you can do that pretty easily.
I am sure I have written way too much, and much of this is confusing.
Cliff notes:
Use a method that makes sense to you, and consistently use that method every time
Use a simplified game like heads-or-tails to check your method.
Don't get too caught up in other people's terinology, as they might use it inconsistently
