The Interdependence of Risk and Information Management
Because poker is an incomplete information game, you can’t manage risks properly without managing information well.
You do not need to manage information in chess, checkers, and other complete information games. Every piece is clearly visible on the board, and you know exactly what each piece can do. In poker you cannot see your opponents’ cards, nor can they see yours onlinecasinoluxembourg.com/spielautomaten/.
The Central Risk-Management Principle
Getting the best of it does not mean that you are probably going to succeed. In fact, your chances could be quite slim. There are three critical issues:
1. The probabilities of success and failure
2. The amount at risk
3. The potential payout
The combination of these factors is called expectation, expected value, or just EV. If you already understand this subject, skip the next few paragraphs.
If your EV is negative, you should pass. If it is positive, you should take the risk. “It is often worth taking chances on something that is probably not going to succeed if the rewards compared to the risk or cost compare favorably with the probability of success.”2
For example, there’s an overly simplistic rule: never draw to an inside straight. It’s not a bad rule, except for the word “never.” That rule is usually valid because the odds against making the straight are about 10 to 1 and the pot usually offers lower odds. However, if you get better odds, you should draw to it. Let’s look at the way winners decide whether a risk is worth taking.