Effective odds and implied odds

The odds comparison presented in one of my previous blog posts, which is supposed to clue you in on the mathematically correct way to proceed in a hand, is only valid for the turn card. If you have a 4-card flush on the flop, you can only accurately compare your pot odds with the odds of making your hand on the turn. After the turn, there’s another betting round and another card to hit the board which will alter the input of your equation dramatically.

First of all, if the turn misses your four card flush, your odds for hitting your flush on the river will slightly improve as a non correct suited card has just left the remainder of the deck. This, you can calculate accurately.
The pot odds however represent another problem. There’s no way to know how much your opponents will bet and how he will therefore alter your pot odds. You can only make an educated guess, and based on it you can calculate your effective odds, which basically tell you how your estimated pot odds stack up against the odds of your making your hand on the turn or the river.

Implied odds are a little more complicated than that, yet understanding them is probably the most important break-through you can accomplish while studying poker strategy.
Implied odds are at the base of healthy poker play and they explain the relationship between your stack-size and the type of poker strategy you have to adopt, so eloquently put forth by the Harrington system.

Let’s try to illustrate implied odds with an example to make the concept easier to understand. You’re deep-stacked and you’re playing in a 6 handed cash game which is neither tight nor overly loose and aggressive.

Since you’re holding the equivalent of about 300 BBs in your stack, you know you can act comfortably, within the limits of healthy tight aggressive poker play. You pick up a pair of 4s. What do you do?
If you take your pot odds and compare them again with the probability of your small pair improving with the board, you may not like the results, especially not when you approximate your effective odds. Still, the right thing to do here is to call the BB to see the flop.

The flop may hit you with a set, by landing a third 4 on the board thus giving you a monster of a hand, 66.6% of which stays well-disguised in your pocket. You do understand that most of the time, the set will not come by, and therefore, by making this call over and over you’ll end up losing money. Why is it a good call then to see the flop on a small pair like that? Because the few times that your set does fill up, you’ll take down huge pots on that hand. As a matter of fact, these pots shall be so big that they won’t just make up for all your previous losses, they’ll generate you revenue too.

These are your implied odds in action. Every time you decide to see the flop on any pocket hand that you picked up, you’re hoping to be hit by the flop for something, knowing that you’ll lose money on all these flops you see, but you’ll more than make up for these losses when you do land a good hand.