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positive EV with fold equity.

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positive EV with fold equity. - Fri May 06, 2011, 03:56 PM
(#1)
andrei17731's Avatar
Since: Aug 2010
Posts: 160
Say that you're playing a hand, the pot is 3000, you're a 2 to 1 underdog and you're thinking of betting out 2000. You calculate the EV and it turns out that you'll be losing money in the long run and therefore it's not profitable to call.

EV= (3000)*(.33)- (2000)*(.66)= 990- 1320= -330. So you get a negative EV.

But then you remember that in this situation he folds half the time, so now u calculate your fold equity, added to your equity and you get a positive EV. So you decide to bet.

FE= (.5)*(.66)= .33
Total Equity= (.33)+(.33)=.66

EV= (3000)*(.66)- (2000)*(.66)= 1980- 1320= 660

Would you be able to use fold equity to make a positive EV, such as the example above, or not?
 
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Fri May 06, 2011, 07:41 PM
(#2)
TrumpinJoe's Avatar
Since: Jun 2010
Posts: 4,557
Your no fold equity example contains a small error. When you bet 2000 into a 3000 pot you will win 5000, not 3000, as you must count the call of your bet. So the proper win portion is 5000 * .33 = 1650 making the bet have a +EV of 310. The lose portion is .67*2000 = 1340 as the equities must add to 1.000

The same mistake was carried over into the fold equity calc.
50% you win 3000 = 1500
16.5% you win 5000 = 825
33.5% you lose 2000 = -670
So the final EV is 1655

Now if you were calling a 2000 bet instead of making a 2000 bet your calcs would be correct.
 
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Thu May 12, 2011, 02:17 PM
(#3)
andrei17731's Avatar
Since: Aug 2010
Posts: 160
"16.5% you win 5000 = 825" I don't understand where you got the 16% from?
And, lets say, like you said, he bets out 2000 the pot is 3000 now and I decide to call.
You said that the equities must add up to 1.000, well in my second part of the EV, I'm using .66 in both cases, but that's because added the fold equity to my winning equity. Is that okay?

Last edited by andrei17731; Thu May 12, 2011 at 02:20 PM..
 
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Thu May 12, 2011, 03:03 PM
(#4)
TrumpinJoe's Avatar
Since: Jun 2010
Posts: 4,557
Quote:
Originally Posted by andrei17731 View Post
"16.5% you win 5000 = 825" I don't understand where you got the 16% from?
With 50% fold equity you win 3000 50% of the time. The 50% where you are called you win 33%. 0.5 * 0.33 = 0.165 or 16.5%
Quote:
Originally Posted by andrei17731 View Post
And, lets say, like you said, he bets out 2000 the pot is 3000 now and I decide to call.
You said that the equities must add up to 1.000, well in my second part of the EV, I'm using .66 in both cases, but that's because added the fold equity to my winning equity. Is that okay?
You cannot add those two equities together as they have different a basis. You win 3000 when folded to but you win 5000 when you call and win.

There are three scenarios when you are the aggressor and no more chips are left to bet.
#1 is they fold and you win (3000 in this case).
#2 is they call and you win (5000 in this case).
#3 is they call and you lose (-2000 in this case).
You must address these equities separately and they must add to 1.000 or 100%.
 

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