Whenever players are ahead in a hand, they think that it’s their right to win. After a session, they’ll often report their results as follows: “I was down $200, but I really should be up $500 because of the bad beats I took.” Unfortunately, this thinking is misleading, because it fails to take into account the very real probability of losing the hand. Remember, poker is a game of giving yourself in edges, and very rarely are those edges absolutes. (But as long as you are actually giving yourself edges, you will come out ahead in the proverbial long-run)
What is Pot Equity?
Pot equity is the percentage of the pot you expect to win in the long run. If you subtract your investment in a pot from your pot equity, then pot equity becomes just another way of expressing expected value. But having many ways of thinking about expected value is helpful both for understanding it and calculating it easily.
Suppose you’re playing in a no-limit hold’em game with blinds of $1 and $2. One opponent limps, you raise to $10 with AA, and someone behind you goes all-in to $50. The blinds fold as well as the initial preflop limper. You call, and you find that your A♥A♦ is facing K♦K♠ for a $105 pot (let’s assume $2 rake, meaning that the pot is actually $103). You’ll win about 81.71% of the time and tie about .46% of the time. Your equity is (.8194)($103) = $83.90. The percentage, .8194, is obtained by taking your winning percentage and adding half of your tying percentage (because when you tie, you only get half of the pot).
Short Term Variance; Long-Term Results
Your goal is poker is to make decisions yielding a positive expected value. Another way of saying this is that you need to think of the process rather than the results, and you need to think of the process in an honest light.
If you think of your results in terms of “should haves,” you’re in the habit of overestimating your expected profit, and if you overestimate your profit, you’ll seldom reach your expectations every session, meaning that poker will be a very frustrating experience for you–one of the worst feelings in life is repeatedly failing to match expectations. Instead of thinking in terms of “should haves,” begin thinking about your poker in terms of pot equity. At the end of the day, you’ll be a much more sane, and a much more happier player, and a much more analytic player. Poker is supposed to be fun, so respect and enjoy the process!
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