The concept of Expected Value is a theoretical one, and something that casual poker players typically don’t take into account, but one nonetheless that can offer a big impact on a  poker player’s long term profitability, especially in cash games. The basic idea behind expected value is what you might expect from the name- the value one could typically expect from taking a particular action, usually making a call in a poker game.

At its most basic, the EV of an action is the amount you can expect to win less the amount you can expect to lose. If the EV is positive, this is a vote in favor of you taking the action. If the EV is negative, this is encouraging you to not take the action. The big question is, then, how to tell what the potential wins and losses might be so that you can extrude the Expected Value.

A common illustration of determining EV is the coin flip. If you found someone willing to wager on coin flips with you, and give you ten dollars if you won but only take one dollar if you lose, it would work like this. A coin flip is, for the sake of argument, a 50/50 proposition. That is to say, given limitless coin flips and no other influences, the coin will show heads half the time and tails have the time. This means that out of 10 flips you can expect to win five times, for $50, and lose five times, for $5. Take the wins and subtract the losses, and you end up with $45, a definite positive EV that tells you it would be foolish not to take the bet.

Does this mean you will always walk with $45? No. A coin goes heads over tails 50% of the time over the long term—it is perfectly possible to show tails eight, nine or even ten times in any given series of ten flips. Eight times would mean you win $20 and lose $40, so you walk a loser, but given the odds you can expect to win more than lose.