Let's start out with the definition of Effective Odds:

Effective Odds- The ratio of the toal amount of money you expect to win if you make your hand to the toal amount of bets you will have to call to continue from the present round of betting to the end of the hand. (Theory of Poker definition)

What it basically is, is this. Let's use a flush draw for example. You think if you make the flush you will win 750 altogether. You'll have to call 100 to make your flush. Your effective odds are 7 1/2 to 1. The probablity of you hitting your flush is about 1 in 3 making this a mathmatically sound call to make in order to chase for the flush because the mathmatical expectation is positive.

In the previous example I talk about how effective odds can tell you to call. But how can they tell you when not to call? Let's use the same situation as the first example. Except you have to call 500 in order to make your flush. Your effective odds are 7.5 to 5. Your going to make your flush 1 in 3 times. This would be a fold because you have a negative mathmatical expectation.

Effective odds may seem complex at first. When you first start using them you might think it is useless. But after using it for a couple of weeks straight, never straying from thinking about them it becomes easy and a very profitable tool. It is advanced concepts like effective odds that turn a good player into a great one. Or an average player into a good.

Good Luck at the Tables!!
Highrolla