You've probably heard of the term 'Fold Equity' by now, but maybe you weren't 100% sure what exactly it means. In this article, we will explain in more detail what it is all about and why Fold Equity is essential.
Fold Equity is the probability or chance that we will force the opponent to fold with a bet or raise. For example, if we have a pot of $100 and the chance that our opponent folds is 50%, we automatically win $50 with the bet, i.e. 50% of the pot.
Why is Fold Equity important?
We use fold equity to build our optimal strategy on every street (flop, turn, river).
Every time we don't have a hand, we come to a situation where we can bluff, and in that situation, we need to think about Fold equity in order to grab as many EVs as possible.
Of course, you should be careful and determine profitable bluffs; for a bluff where we have 0% equity, i.e., where we have "air" and 0% to win the pot, our fold equity must be greater than the risk/reward ratio.
The formula for the risk/reward ratio as a beta player is as follows:
Risk-Reward Ratio = [Stake Size / (Stake Size + Pot Size Before Staking)] x 100
or (shorter written) Risk-reward ratio = [B / (B + P)] x 100
Example of pot odds calculation
Let's say you bet $50 into a $100 pot:
Risk-reward ratio = [50 / (50 + 100)] x 100
Risk-reward ratio = 0.33 x 100
Risk-to-reward ratio = 33%
In this example, assuming our bluff has 0% equity when we get the call, our $50 bet needs more than 33% fold equity to be profitable in the long run.
The more Equity (chances to win the pot when you are called) you have, the less Fold Equity you need to have a profitable bet.
This is because you have not one, but two ways to win - you can either hit your outs or force your opponent to fold.
Fold equity is a great weapon and the best tool when bluffing. Even with a small % of equity, our bet can turn from a losing one into a profitable one.
If you study this concept well and how it affects your winrate in the long run, you will definitely become a fan of a more aggressive approach to the game and earn more money!