A Mention Of Risk Vs. Reward In Poker

Any remotely serious card player should have a clear understanding of Risk vs. Reward. The basic concept is to determine the cost of a decision, or “risk,” and the value of the expected return, or “reward.” Players may then decide to pay a cost if they feel the reward outweighs the risk. Risk vs. Reward is a decision process that may be applied in an instance, but is affected by the overall probability of an event. There are two important examples of when Risk vs. Reward should be considered by a poker player:

• How much of your chip stack at the table is worth risking before you make a play, as well as how much of your overall bankroll is worth risking before you even decide which table and stakes to play. For example, consider a No-Limit Hold’em game with a $100 buy-in. Your objective should be to make correct plays, where you are willing to risk a 52% chance of doubling-up to $200 if it means a 48% chance of losing your original $100 stake. But you must also consider the risk of your overall bankroll. It would not make sense to play a $100 buy-in game if you only have a $100 bankroll. Not only should you be willing to risk a 52% chance of doubling-up, but you have to also allow for the probability of the 48% chance of losing the $100. Therefore, it would make more sense to play a $100 buy-in game if your bankroll was at least 10Xs the stake, or $1,000. So, all things being equal, if you risk $100 ten different times, and you double-up six of the ten times, while losing $100 four of the ten times, you’ve gained $200. And the risk of $100 is an acceptable risk for a $200 reward because the sum of your risks over ten games was only 1/10 of your bankroll. Because if you lose one day, you want your bankroll to allow for another day.

• The second example of Risk vs. Reward applies more towards a specific hand you are playing, and calculating the amount of money that is worth risking based on the size of the pot and/or the probability of you making the hand to win the pot. Also called “Pot Odds,” all successful hold’em players apply some form of calculating the ratio of the pot size (and thus, what could be won) compared to the size of the bet a player must call to remain in the hand. An example in hold’em would be if you had a hand before the river card is dealt that may not yet be the best hand, but you may have eight “outs,” or eight cards can still be dealt for you to make a winning hand. This gives you about a 17.4% chance of hitting an out on the river. And if the pot is $100, it is worth calling a max bet of approximately $21 because $100+$21 = a bet that is 17% of the pot, and as long as your odds to hit is above 17%, the bet is worth calling. Pot Odds is not too hard to understand, however, learning how to apply the theory as a part of a winning method takes more time and practice. There are shortcut formulas to help apply the theory (which will be discussed/added soon on this site), but also keep in mind that there is more to Pot Odds than we’ve discussed so far, and that there is much more to poker than just Pot Odds.