Poker risk-reward ratio must be as small as possible

Mar 26, 2013 3:00 AM

His well-read, dog-eared copy of Hold’em or Fold’em? – An Algorithm for Making the Key Decision neatly tucked away in his jacket pocket, our hero sat down to play in the $3-$6 limit game at a favorite casino.

After a short time, positioned two seats after the Big Blind (BB), he calmly folded A-8 offsuit. Then he spent the rest of the hand observing his opponents. Now, just a few hands later, in the cut-off position, he called with the identical hand, A-8 offsuit. Strange, you say! What’s the difference?

Does the Hold’em Algorithm have something to do with his actions in the almost-identical cases? You betcha! In the final analysis, it’s a matter of risk versus reward.

In both of these cases, our hero held the identical marginal drawing hand. The first case, in an early position, he could not be assured the betting would not be raised, nor that it would be a multi-way pot (three or more opponents staying to see the flop).

On the other hand, in the second case where he paid to see the flop, being in a late position he saw there was no raise and three opponents had already limped to see the flop. Now that you know the difference between these two hands, both with the same starting hand, let us try to understand why that difference is so important. Why indeed?

The Hold’em Caveat: A poker novice or a Poker Pigeon likely would not notice the difference and would almost certainly go home a loser.

To emphasize the importance of the difference between these two seemingly identical hands, especially in a limit game, we have labeled the reason the Hold’em Caveat. It’s an integral part of the Hold’em Algorithm, the strategy that makes it so easy to make the best starting-hand decisions.

We all know you cannot win unless your starting-hand decisions are wise; that’s being prudent and astute. After all, you came to the casino to win.

To best explain the Hold’em Caveat, I’ll quote from the third edition of the good book. (I am not referring to the Holy Bible but rather to the booklet, Hold’em or Fold’em? – An Algorithm for Making the Key Decision.)

“It is important that marginal (mediocre) holecards that barely meet or slightly exceed the quantitative Starting-Hand Criteria be folded either (1) if there is a raise – or likely to be a raise after your bet, or (2) if it is not a multi-way pot (three or more opponents staying to see the flop.)”

Mind you, both of these important conditions must be satisfied to justify making your initial investment in that hand. Otherwise, you would be strictly gambling – just like playing the slots or roulette wheel in Las Vegas. (We all know, in the long run, it’s practically impossible to beat the house in those games.) Quoting further:

“With a marginal drawing hand” – like A-8 offsuit – “a raised bet usually makes it too costly to warrant your investment; likewise, the investment would less likely be profitable (i.e., would not yield a ‘return-on-investment’ – a Positive Expectation) if fewer than three opponents stay to see the flop. The ‘implied’ or expected pot odds at the showdown would be too small.”

Bottom line: Playing poker to win is much like making an investment. You want to put as little money as possible at risk, with the hope of earning (winning) as much money as possible. In short, the risk-reward ratio should be as small as possible.

This applies especially when you are dealt marginal drawing hands – hands that usually must improve to become winners and barely meet or just slightly exceed the Hold’em-Algorithm numerical criteria for starting hands, depending on position.

In such cases, the Hold’em Caveat is a convenient way to remember some of the key factors that are essential in deciding preflop whether to Hold’em or Fold’em.

“The Engineer,” a noted author and teacher in Greater Los Angeles, is a member of the Seniors Poker Hall of Fame. Contact George at [email protected].

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