OK well I am not confused but I know that it is a concept other people have trouble with but is a lot simpler than people make out.
Pot Odds are basically a way to evaluate your chances of improving to the risk you are making by calling a bet.
First you need to know how to calculate outs.
What is an out?
An out is a card that can come to help improve your hand. EG: If you have a pair of 55s, an OUT to help you is another 5.
How do you calculate outs?
This bit is more complicated. Lets break it down to the most common outs there are.
Overcard Outs : This is when you have say an unpaired hand on a flop. On this flop anyone with a Ten in their hand has made Top Pair and to beat that hand you need to catch an Ace or a King.
Two Pair Outs : This is when you have a Pair with 1 card in your Hand and still have a live card. An example being say the and if the board came with then you made Top Pair but if your opponent is holding the 7 and 9, you need Outs to improve your Two Pair with another 5.
Trip Outs and Quad Outs : This is when you have a pair (either a pocket pair or paired the board) and you need to catch 1 more card of that rank to improve to Trips (and then a further one to improve to Quads).
Gutshot Straight Outs : A gutshot straight (or an inside straight) is when you have only 1 card that can make a straight. This is typically one card in the middle of the hand (such as if you have in your hand and the board is showing and you need any 9 to make your straight) but this term also refers to Broadway or the Wheel where the card you need is at either end of the line. So if you have an AK and board is QJ, you need a T to make the straight but this isn't the middle of the straight itself but still offers the same outs.
Outside Straight Outs / Open Ended Straight Outs : Unlike a gutshot, this is a straight where the middle 4 cards of the straight are filled in with a combination of 2 on the board and 2 in your hand. You can make a straight by either end of the draw, thus doubling your Outs in comparison to a Gutshot.
Flush Outs : This one is a good one and gives you a lot of Outs. You however can be tricked due to the high number of outs to getting married to a Flush Draw... its still just a draw so be careful!
Full House Outs : For a Full House you need to have a pair on the board and trips. The most common 2 ways to get a Full House are 1) Trips and a board pair 2) Two Pair and one of the pair upgrades to Trips
Either way you are basically looking for one or more cards to pair.
So how many outs does each give me?
Overcard outs (you count this for every overcard you hold) give you 3 outs per Overcard. This is because there are 3 of that Card (say an Ace) pottentially left in the deck. Be warned that all an Overcard Out does for you is give you One Pair... whilst this is technically an Out that improves your hand, it doesn't lock you in for a win as you could still be behind to a greater Pair or better... but its still worth counting it.
NOTE : Throughout this post I will be referring to outs as being available but there is nothing stopping the cards from being in your Opponents hands or Opponents folded them. Unfortunately you can't factor that in and just need to focus on cards that could pottentially help... its not Tarot reading, its just assessing the odds with the information we have
So If you have and the board has a King at best, you have 3 overcard outs however if you have and the board has a Queen at best, you have 3+3 = 6 overcard outs.
Two Pair outs are typically when you have an unpaired hand from the flop and you flop a pair. Technically you can consider a pocket pair + a board pair as an out to Two Pair but for the purposes of this discussion just factor in the earlier situation. For this you have 3 outs (since there are 3 of your other unpaired card still left in the deck)
So If you have and the board has an Ace, you have 3 Two Pair outs (the other 2s)
Trip Outs and Quad Outs are dead simple... its the remaining cards left of that rank. So if you have a pair its 2 cards left and if you have trips its 1 card left.
So If you have , you have 2 Trip outs (the other 5s)
Gutshot Straight Outs are again quite simple. You need 1 card to improve your hand to a straight so its 4 outs.
So If you have , and the board is you have 4 outs (the other 4s)
Outside Straight Outs are basically the same as Inside Outs but multiply by 2
So If you have , and the board is you have 8 outs (the other Js or the other 6s)
Flush Outs are a little harder to figure out at first but easy when you get used to it. There are 13 cards in a suit so you just deduct the cards you have of that suit from the 13, deduct the cards on the board and thats your outs.
So If you have , and the board is you have 2 clubs, board has 2 which is 4 and 13-4 = 9. Typically unless it is some kind of 4-flush (where you have 8 instead of 9) its mostly going to be 9.
You can combine outs as well
with a board of is quite a strong set of outs.
Firstly you have the 2 overcards, any Q or K (which is 6 outs)
Next is the Open Ended Straight where any A or T (which is 8 outs)
Lastly is the Flush Draw where any spade (which is 9 outs)
This is a total of 23 outs... this is pretty much never going to happen and if it does you need to get your money in the middle because your opp only has an 8% chance to outdraw you!
But mostly a simple Flush draw like with a board of will give you 9 outs.
So now you have your outs... what do you do with them?
Although the exact maths is about 1-2% difference from what we roughly use, this is much easier and is as good as you need it to be.
It is the 2/4 rule. This means that you take the outs you have and multiply them by 2 if you have to make a decision in 1 card (so thats flop>turn or turn>river) or multiply them by 4 if you have to make a decision for the next 2 cards (so thats some kind of all-in from flop>river)
So the above extreme example of 23 outs gives you a 92% chance to win if you got your money in on the flop
But for the more realistic example of a Flush Draw with 9 outs, if you want to draw from the flop>turn, its 2x9 (1 and if from the flop>river its 4x9 (36)
So what do we do with this number?
This number is the percentage chance (roughly) you will pickup the cards you need and improve. So going from the flop to the turn with a flush draw is an 18% chance to catch.
So aside from giving you an idea of what chance you have to improve why do we use it?
Well we combine it will the Pot Odds to see if our gamble (the chance to improve) is worth the risk (the chips we are putting in)
So next we need to figure out the pot odds.
Some people like to do this as a decimal like 4:1 or 3:1 but I prefer to use percentages since it lines up with the outs calculation.
This is a lot simpler and all you do is take the size of the Pot and the incomming bet to you to decide if it is worth calling.
You basically take the size of the Pot and the incomming bet into you and figure out what the cost vs the Pot is to call. So a pot of $1000 and a bet of $500 is a 50% bet. You ideally need outs of 50% or better to continue to draw 1 card. If it is $1000 pot and $100 you only need 10% chance to improve.
Now we always use the 2 part of the 2/4 rule when figuring out how to go from Flop>Turn so unless your opponent is giving you an All-In situation, just focus on the cost to proceed to the Turn. That way if the turn doesnt bring you any joy you just repeat the process to see about the River.
So for a Flush Draw we need 9 outs which means that we multiply that by 2 to get 18%. This means that if an opponent checks or bets smaller than 18% of the pot it is a good bet based on Pot Odds alone to continue. If you make this call then you are make an educated decision about your bet and anything ABOVE this number is a gamble.
This is because that in the overall scheme of things, luck balances out. If you flip a coin 100 times, each time it will have an equal chance of being either heads or tails.
If someone bet you $100 that it would be heads and if you lose you would only pay them $50 but if you won they would pay you $100, then you would be a fool not to take his bet and even if the first 10 times you run it, it comes up heads and you lose $500 but overall after 100 flips you would have won on average 50 times and lost 50 times.
This means you would have paid your opponent 50 x $50 ($2500) and he would have paid you 50 x $100 ($5000) and you would be a fool not to take this bet.
This is the same thing with Pot Odds.. the better your money to call, the better decision you make so if your opponent makes it only 9% of the pot to proceed to the turn and you have a 18% chance to hit your flush then you will win twice as much as you lose in this gamble in the longterm.
So lets look at a more practical example with a pot in question
You are starting at a flop with and the board is . You have an 18% chance to catch another heart by the Turn. You have position and the Pot is currently $10,000. Your opponent bets $500 into the pot (which is about 5% of the pot) and you would be a fool not to call here because you have fantastic Pot Odds.
If the turn doesn't come with a heart, what do you do? Same thing! - Wait for the decision and see what the price is to the turn. The outs are the same as they were before, nothing has changed on that front and the calculation to the river is exactly the same (multiply by 2).
This time he decides to increase the bet to $1500. The pot is $12,500 now and the cost is a bit more at 12% but you are still ahead from a Pots Odds Point of view to catch your heart and if you made the call here it would be a good call.
Now... how to use Pot Odds?
Don't use them as a standard rule regardless. You should always factor in certain things such as your stack size, your position in the Tornament, other cards that could beat the outs you are drawing too (ie you have a straight draw but there are 3 hearts on the board so you could be beat regardless of your outs) but generally if you feel like you arent in danger of being knocked out and are generally unsure if a decision is wise to continue with, Pot Odds are a good tool to help you decide.
Typically if you play against good players you won't get the price to call against strong hands. Most good players (and you as well hopefully) should be betting a good 50% on the flop if they have a good hand like top pair, a set or top two pair. By betting it 50% they are bloating the pot and making it so that in a $1000 pot, the pot becomes $1500 with their bet and its costing you $500 to call. This is a 30% chance to proceed and unless you have STRONG outs (like a flush + straight draw) or your already have made your hand then you should be getting away.
So what happens if you do continue with a bet that costs you 30% Pot Odds chasing a flush draw at 18% and catch on the Turn?
Well done... you beat the odds but in that spot you will only catch 18% of the time but are paying 30% to see it... going back to our Coin Flip story, this would mean that over 100 flips if the chance at catching a tails (because its a trick coin and heads comes up 82% of the time) is 18% but every time you miss you have to pay $30 and everytime you hit you get $100.
This means over 100 flips you will win 18 times and get $1800 but you will miss 82 times and pay $2460... as you can see, not worth it
Think of it simply as this
If you ONLY ever made decisions based on Pot Odds (typically this would be in Cash Games where you can reload and your stack size is unlimited) you would be gambling by not adhering to the Pot Odds and Outs and making money when you do.
Don't get me wrong, its fun to gamble sometimes and depending on the situation, the read on your opponent or other things such as discounted outs (the cards you think your opponent has that count against your outs) and implied Pot Odds (the Pot Odds you will get if you call the raise, hit on the turn and get raised again)
Overall if you are asking "Should I make this call?" simply weigh up your outs (either manually or using the MANY outs calculators online) and then weigh up your Pot Odds.
If it is close (say it is a 20% cost to proceed but you only have 18% outs) you could decide to go with it
If it is way off (say a 75% cost to proceed but you only have outs to the trips, so 4%) then you should get away from it
If it is way ahead (say a 10% cost to proceed when you have a 25% chance to catch) then you should consider making it
There is one other factor to using Pot Odds and that is correct bet sizing.
There is a big reason why aggressive opponents make lots of money with their strong bets (say 50% of the pot on the flop and 75% on the turn) over those that just make the minimum bet as they go.
It isn't because they get lucky or have a system... it is because that the majority of the time they can convince opponents who have a poor hand to draw to a better one at a cost that isn't worth it.
So if you have AK with an Ace on the board but there are 2 flush cards showing... assuming your opponent is drawing to the flush, you bet a $1000 pot $500, its now $1500 (and a 30% cost to call) and the drawing opponent makes it.
Now on the turn no heart appears and you bet it 75% so a $2000 pot becomes $3500 and the cost to call is $1500 (and a 42% cost to call) and the opponent isnt factoring in pot odds and makes the call thinking he has already bet a lot and if he catches the flush he will win big.
The river doesnt fill the flush and you bet 50% for value... if all he has was a flush draw he should fold, if he has anything in his hand he might even decide to call (say if he had a middle pair + FD) but if he does fold that means you have walked away with $2000 chips of your opponents.
If you make this play everyday, everyhand you can for the rest of your life you will run into people that do catch their flush and either have to fold to a re-raise or call and lose the hand but overall you will end up winning a lot more than you lose.
Same scenario with a bad player and the same hand.
He doesn't understand bet sizing so he bets 10% (2bb) of the pot with his AK, top pair top kicker.
His opponent has the same flush draw and calls the bet (since it is only a 10% cost)
On the turn the heart doesnt fill in and the same player bets another 10% and you call again.
Now lets split this into 2 scenarios
In the scenario say you are the Opponent and you catch a heart, he bets the same 10% and you raise him... if you are lucky he will call and if you are REALLY lucky he will re-raise you.. either way you are getting paid off in most cases... you only risked 4bb to get to this point which for the cost was well worth it
Now the next scenario is that you don't catch, he bets the same 10% and you fold. You wasted 4BB on that chase but because he gave you the right price, if you ran into the same situation with that opponent 100 times in the future and he bets EXACTLY the same way, 18% of the time you will get the flush and since 18 is greater than 10, over the longterm you will win more than you lose.
So the key is not to give away free cards. This doesn't just mean checking, this also means betting it so small that you give the right Pot Odds to call.
Sometimes its impossible not to avoid giving someone Pot Odds... you can have 4 people in a hand, the lead raiser brings it in for 50% of a $1000 pot for $500 making it $1500, next to act calls making it $2000 and the next opponent calls as well making it $2500... now its your turn.
For a $500 bet you can get to see the Turn card and the cost to you is 20%. If you have a Flush Draw at 18% this is so close its WORTH IT to call even though if you were one of the other opponents calling, and having the same decision with the same cards it WOULD NOT be worth it.
This might sound quite complicated but once you start using Outs and Pot Odds regular enough you will start to get the hang of it and if you are unsure just use it for the most common drawing hand there is, a Flush Draw. More people draw to a flush than any other hand in NLHE and for that reason just start thinking about the 9 outs with an 18% chance for a Flush Draw and the next time you are given the choice to draw to it, look at the cost to call.
You need it to be a check or at most 18% of the pot to call. So a $1000 pot, the bet needs to be equal to or under $180 otherwise you should fold if you want to make sure you are making the right decision for Pot Odds reasons.
Trust me... this has saved my life so many times because in countless spots I have had a Flush Draw or Straight Draw and been unsure if I should call a flop bet to see the Turn. I didn't know what price I should be getting and then I learned how to figure out Odds and Outs and when an opponent fish-bets the minimum into a big pot allowing me to basically see a free turn card, I will take it in most spots because overall in the longterm the play will make me money because when I hit my hand and I can convince my opponent to ship me all his chips, it was well worth the price.
So... if you are up against people in a hand, bet it strong to push them off their hands. This doesn't mean the pot, typically a 50% bet is enough to both gain value as well as force people who are drawing to be doing so at the wrong price. You won't lock-in a win and they can still sometimes draw their hand and suckout on you but in the longterm you will get more of their chips this way.
And if you are up against weak players willing to minimum bet or weak bet into a pot where you have a draw, if you get the right price - call... make sure you arent doing it without considering the opponent, the read, the hands that can beat you and your stack but overall if they min.bet a pot and your draw is strong enough in outs to improve at a better percentage rate than the cost to call, its worth it to do so.