After you understand how to calculate your odds and outs of poker hands. The next step is applying this information toward valuing each pot according to the size of the pot and your outs. Using probability in valuation is nothing new. It is the basic approach toward valuing stocks and other investments.

For a quick and simple understanding of pot odds. Consider this example: Imagine a game where a 2 sided coin was flipped and if it landed on heads you would be paid $10. The question is, how much would you pay to play this game each time? If you answered less than $5, pat yourself on the back, you understand pot odds (unless it was a lucky guess).

Why less than $5? In each game you have a 50%(1/2) chance of winning $10. If you pay 5$ each time to play, you will be getting even money. Over time you will break even. You will not lose money, but you will not win money either. Why waste your time? If you pay less than $5 you will win money over time given the odds. Further, if you pay more than $5 to play, you will lose money over time. Notice: $5 is equal to 50% of $10 or (probability x pot). If you were using a mythical 4 sided coin and you were paid $10 for landing on one of the 4 sides. Even money would then be 25%(1/4) of $10 or $2.50.

Let’s look at 10 trials if you pay $3 to play.

50% of the time you will lose and pay $15 (5 trials x $3) to win $0.
50% of the time you will win and pay $15 (5 trials x $3) to win $50.
Total you would pay $30(15 + 15) and win $50 for a net profit of $20. Of course this assumes the probabilities hold true for this small sample. These probabilities will be more accurate as the amount of trials increases.

This example is no different from pot odds in poker. To calculate the value of the pot, you simply multiply the odds (percentage) of winning times the amount you can win, in the case of poker that amount would be the pot size. After you calculate even money, it is as simple as paying anything less than that amount.

You can find the odds of winning on the turn with the following formula: (# of outs x 2) + 2 = % to win hand.

If you have a flush draw on the turn, using the formula you will find that you have a 20% chance of making your hand [(9×2)+2=20]. If the pot is $100. You want to pay anything less than 20% of the pot after all bets are included after your bet or call. Meaning if this situation was heads up and your opponent bet $20. The pot after all bets are in will be $140. You will be willing to pay anything less than $28 to see the river and hopefully hit your flush. If you pay less than $28 and can repeat this situation many times through other hands. You will win money over time. This exact situation with the same amount will not occur in succession. However, over time the principal will remain the same. You want to pay appropriate values for hands and avoid overpaying for draws.

In poker, you don’t have to win every hand. The key is losing some of the time and winning most of the time.

TIP: Many people are intimidated by working with percentages. However, there are some simple tricks you can use to estimate the percentage of the pot. If you know how to find 50%, 10% and 1% of anything you are good. Here’s how to use it.

Find 25% of 350. Many people would have trouble with the multiplication in their head. A trick to finding this percentage is simply finding 50% of 50% of 350…or 1/2 of 1/2 of 350. 50% of 350 is 175, 50% of 175 is approx 87. So, 25% of 350 is approximately 87. You only need to be accurate within 1-2%. The actual number is 87.5 which is close enough. You will want to round down so that your approximations are more conservative and you will avoid overpaying for hands even by a few percentage points.

Find 33% of 400. A simple way to find this is break it up into 10% and 1%. 30% is simply 3 x 10% and 3% is simply 3 x 1%.
10% of 400 is 40, multiplied by 3 is 120. 1% of 400 is 4, multiplied by 3 is 12. So, 33% of 400 is 120 + 12=> 132.

The pot size can be in terms of dollars as in cash games or value of chips if you are playing a tournament. The principal is the same.

You can also apply this shortcut to other percentages like 5% which is simply 1/2 of 10% and so on.

If you don’t fully understand it all. Don’t worry. Like anything, it just takes a bit of practice. I really only began to fully understand percentages and probabilities after I started playing poker. It gave everything a hands on application.

If you need further relief from the math, you can round the percentage DOWN to the nearest tenths place in increments of 5%. Example: 33%=>30%, 46%=>45%, 22%=>20%. It is best to be as accurate as possible. But, The difference of 1-2% will not make too much of an impact on you deciding to play or fold. And since you are rounding DOWN, the rounding errors will keep you from loosing money, due to overpaying for hands even by a few dollars.

You may want to remember common percentages for both the turn and river for different draws. Mainly, Straight Draws, Flush Draws and the monster, a combination of a flush and straight draw.

Keep in mind you typically only want to draw into hands that will get you a premium hand. Playing pot odds on a big pot just to get an 8 high flush is probably not a good idea. This is especially true with more players at the table, because the likelihood someone else will be drawing for a much higher flush is greater. You also want to avoid drawing into hands when a pair is present on the board, this is because you can be trumped by a full house. The last example is drawing into sucker straights. Example: Hole Cards: 3,6h…Board: 5s 7c 8s…This hand is not a strong hand to draw into with 6-10 players at a table. The reason: The only card you want to see right now is the 4. Someone may already have the nuts with 6,9 and even if you hit your 9, you will then be guessing what other straights may be out there. It’s not that you should never play from these positions, but drawing into large pots using pot odds with these hands will tend to get you in trouble. Stick to the the more promising draws.

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