Poker is a game of surmises since our opponents; cards are hidden. One way to surmise a hand is by determining the odds of winning the hand. This is based on the strength of the player's hand and his or her imagination as to what he opponents might have.

Equity in Poker Can Rise and Fall Quickly

We have to evaluate our hand against our opponents’ hands even though we don’t have all the information we need to do so.  One such way of evaluating our hand is by determining as well as we can what our true chances of winning are.  This is called equity.

Poker Requires Close Attention on Every Hand

There are a few poker terms that beginners have really no understanding of.  Even excellent players need to refresh their understanding of them from time to time.  In short, they are easy to lose track of and players easily get confused by them.  This is like a pianist not playing for a week and then stumbling a little on Mary had a Little Lamb.  The pianist doesn’t stay stumbled for more than one turn of a simple ditty and good poker players refresh their understanding of equity, pot odds, and value quickly.

Always Practice Tactics and Strategy

Beginners need to go over these concepts often.  Online poker is perfect for beginning players to learn these concepts.  You can play with a pocket calculator to figure equity and pot odds.  You would never do something like this in front of live opponents.
Also, when you play poker online, you don’t have to worry as much about avoiding tells.  So, you can concentrate on the arithmetic of poker.  Another important thing to remember when you’re learning the arithmetic of poker is to pay attention on every hand.  You will fold most of your hands pre-flop but that only means that you’ll be learning from other players’ hands.  Do your best to never “skip” a hand.

Equity

In poker, equity is similar to the equity you have in your house.  If you have a mortgage, the bank owns some of the house and you own the rest.  That portion is your equity in the house.  If the house goes up in value while you are still paying off the mortgage, the increased value of the house is your potential equity because you aren’t now selling the house.  If you do decide to sell the house to reap a windfall profit from the rise in its value, the increased equity all belongs to you.
In poker, your equity in a hand is the percent chance you have at any time to win the hand.  Equity rises and falls with each round of betting.  You might still have a chance to win a big pot even if you miss the flop but your equity would be drastically reduced as a percentage possibility that you’ll win the pot.  Your chances of winning the pot are so low that you fold, giving up your equity.
In almost every hand, no one knows with exact certainty what their equity is until the last card has been dealt.  We approximate the chances we have of winning the pot.

Pre-flop Equity

You have to call the big blind in order to see the flop. So, every hand will have the call bets and possibly some pre-flop bets.  If you call all bets or if you raise on your own, you will be raising not only your equity but the equity of everyone else who stays in the hand.
Your equity in a pot pre-flop may be more than you think your hand is worth.  This means that others have raised beyond the value of your hand so you fold.  Whenever a player folds a hand, the equity of every remaining player goes up.

After the Flop

At every street, you either have a completed hand, which in poker terms is called a made hand, or you have a draw to a hand.  Our equity in the pot will often determine if we put in a little more to see the next card.
This concept is very present in video poker although on a much more accessible plane.  In video poker, if we bet the maximum, we might go for a Royal Flush even when we might win a lesser hand.  The chance to win the big payout for the Royal Flush makes that the correct play.
In Texas Holdem, you would never stay in a hand just to go for a Royal Flush.  If your poker skill is sufficiently developed, you’ll fold even two pair if you’re convinced the opponent has three of a kind and you don’t want to risk more money on the hand.
In Holdem, your equity may rise with each street and may plummet if a player hits the odd card on the turn or the river.  If you have made hand, you may believe that your equity is 100% when, in fact, it may be closer to 0% if an opponent has a better made hand.

Only Three Dealings

Many beginning players see poker as being far more complex than it is.  You get two cards.  Then there is the flop, the turn, and the river.  A lot can change but it isn’t like the business cycle where there may be hundreds of parameters determining the value of an investment.
The question whether to “buy” or “sell” is much simpler in poker than in high finance.  Equity is one of the few parameters you need to look at to determine if you should stay in the hand.

Imagining the Value of Opponents’ Hands

You always have to imagine what an opponent may have to beat you.  If you have king high, there are many hands that can beat you but if you have a straight, there are far fewer hands that can beat you.  Still, you have to imagine what your opponents might have.
Your equity in a pot is based on the money in the pot and the possible hands that can beat you based on the cards you see and the opponents’ bets.  Now, every poker player overestimates his or her equity when an opponent bluffed and completely fooled them.  In those cases, you learn something about that player’s betting and bluffing style.
That’s another reason why it’s important to watch every hand; you can learn a lot about an opponent by watching a hand that you’re not in.

As Equity Rises

As the amount of money in the pot ruses, most players believe that their equity has risen.  But equity is a percentage of your chances to win.  It doesn’t necessarily involve the size of the pot.
However, if you’re facing an opponent with a short stack, you can increase your equity without improving your hand by forcing the opponent to choose between a dangerous call bet or a more conservative fold.  By putting the opponent in this dilemma, you may increase your own equity in the hand.