The Implied Odds and Fold Equity Continuum

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Introduction

Having coached a lot of recreational and semi-professional players over the last year or so, I’ve noticed that there are some misconceptions that tend to arise regarding the concepts of implied odds and fold equity. In general, I find most players become familiar with these ideas early in their careers, but don’t necessarily always understand the relationship between the two, or how they both fit together along the same continuum. In this article, I want to explain a little bit about the two concepts and how deepening your understanding of the relationship between them could help push your game forward.

Implied odds and why they matter

Implied odds matter because our awareness of them helps us to make a lot of our decisions regarding which hands we should play and why, particularly when we’re flat-calling preflop. In many instances a basic mathematical understanding of how they work can be the difference between us making a tight fold preflop, and getting ourselves into a sticky situation on a strange board postflop. To be aware of the implied odds involved in a certain hand is to think carefully about the possibilities of what could happen later on in that hand, which is never a bad idea.

To be more specific, implied odds help us make decisions about when it’s a good idea to speculate, or to put chips in the pot in a spot where we might be fully aware we’re not likely to win the hand. Setmining is the best example of this. When we call a raise with pocket twos on effective stacks of 150 big blinds, we know we’re likely to lose a small pot or win a big one, which is a great situation in implied odds terms. But in order to decide whether we can profitably call a raise with pocket sixes on effective stacks of 33 big blinds, requires a more detailed insight into the different postflop scenarios which might emerge. We might lose a small pot, lose a big pot, win a small pot, or win a big pot, depending on many variables.

Fold equity and why it matters

Fold equity, on the other hand, helps us find profitable opportunities to show aggression. An understanding of how fold equity works is pivotal to developing a balanced aggressive strategy, both preflop and postflop. If you’re failing to spot instances where you may have fold equity after an opponent raises preflop, you’re probably missing out on a lot of profitable 3-bet bluffing opportunities – in other words, playing too tight. If you’re failing to spot instances where your short-stacked preflop shove has a lot of fold equity, you’re probably blinding down too often. If you’re missing spots to make profitable bluffs postflop, you’re overly reliant on showdown value.

Of course, the flip side of this concept is that the more aggression you show, the more a good opponent is going to recognise that you can’t possibly have a strong hand every time, and therefore assert that he or she has significant fold equity versus your own range. Thus, when the online MTT environment briefly became absurdly aggressive almost overnight back in 2010 and 2011, and it seemed like the 6-bet bluff was a necessary part of every regular’s arsenal, it was a mutual understanding of the concept fold equity that provided the root cause for this consistent escalation of aggression.

The continuum

So how do these two concepts fit together? Well, it all comes down to ranges. When we speculate with a weak hand, it’s because we anticipate that our opponent has a strong enough range that if we do flop well – for example, flopping a set with a small pocket pair – there’s a strong chance we’ll be paid off. The lower the mathematical implied odds we’re receiving, the greater the likelihood of a future payoff needs to be for us to make the play, and thus the opponent’s range needs to be stronger in kind.

But with fold equity, the opposite is true. Fold equity relies upon an opponent’s range being weak. It relies upon them having a wide range which contains a lot of hands that cannot continue – be it preflop or postflop, it simply means that the opponent will fold to further aggression a high percentage of the time. Thus – and this is the key aspect of this entire article – it is impossible to have both good implied odds and a lot of fold equity at the same time, because an opponent’s range cannot simultaneously be both strong and weak.This concept is pivotal to how we play a lot of our speculative hands preflop, and to how we play our drawing hands postflop.

An example of the concept in action

Let me translate that assertion into a made-up hand example for you. Imagine you’re on the button in a $55 MTT, and a player you’ve never seen before min-raises in middle position. Effective stacks are roughly 50 big blinds. You look down at 9h8h, a nice little speculative hand. You think about 3-bet bluffing preflop, but you decide against it, and make the call.

The flop comes 7h 5c 2h, giving you two overcards, a gutshot, and a flush draw. The opponent makes a standard half-pot continuation bet, and now you have a decision to make. You could raise with your strong draw, or you could just call. Which one is correct depends on our understanding of implied odds and fold equity.

If the villain were more aggressive, and had a wider preflop opening range, it’s likely that he’d miss this board more often than not. His range is likely to be very weak, and we would have a good chance of getting him to fold very often if we raised with our draw. If the villain were tight, he wouldn’t have so many random broadway hands and other complete airballs in his continuation betting range, and he’d be folding to our raise much less often. In fact, he may make a 3-bet over our bluff-raise with a lot of his stronger overpairs such as JJ+, which puts us in the position of having to commit most or all of our stack if we want to realise the equity we have on our draw. Obviously this 3-bet is still going to happen when the more aggressive player has JJ+, but that’s a much smaller percentage of the time when his range is wider.

Conclusion

You can see from this example that the relationship between the two concepts drives a lot of our decisions. In this instance we were unfamiliar with the player, so which option we choose often comes down to playing style or other reads (country of origin, timing tells, etc), because we don’t have a lot of information. But the more you know about a player’s range, the more informed your decisions, and the more you can judge which of the two concepts is relevant to the situation at hand.

I often hear students analyse a hand by saying, “well, we have good implied odds here, and some fold equity, so I think we should raise…” – when I hear this, I can tell that somewhere along the line, the two concepts have become independent of each other in their mind. Think of them as a set of scales which are almost always weighted one way or the other to some degree. Very occasionally the scales do balance out, but in those instances you usually have neither implied odds nor fold equity, rather than both at the same time. Master this relationship, and you might find playing speculative hands and draws becomes a lot easier in future.