The expected value (or EV), of a move is the average gain/loss that results from a situation taking into account all possible results and their probabilities.
In order to calculate expected value, you take every possible outcome, multiply each by the odds of that outcome happening, and then adding those numbers altogether.
Example: Suppose you made a bet with me on a coin flip. If it is heads, I give you $5. If it is tails, you give me $1. Should you take this bet, assuming that the coin is a normal one and has a fifty-fifty chance of landing on heads or tails? Of course you should. This is a very good EV situation.
There is a 50% chance of it landing on heads, meaning you will win $5. So, your expected win is $2,5 (0.50*$5). If it lands on tails, you lose $1. So, your expected loss is $0.50 (0.50*$1). Your expected profit is the expected win minus the expected loss. Thus, your expected profit is $4.50. Isn't that great!!!!
In the long run, you will win, even if the coin lands tails the first 20 times in a row, in the long run, it will land 50% of the time heads and you will have profit!!!
In order to calculate expected value, you take every possible outcome, multiply each by the odds of that outcome happening, and then adding those numbers altogether.
Example: Suppose you made a bet with me on a coin flip. If it is heads, I give you $5. If it is tails, you give me $1. Should you take this bet, assuming that the coin is a normal one and has a fifty-fifty chance of landing on heads or tails? Of course you should. This is a very good EV situation.
There is a 50% chance of it landing on heads, meaning you will win $5. So, your expected win is $2,5 (0.50*$5). If it lands on tails, you lose $1. So, your expected loss is $0.50 (0.50*$1). Your expected profit is the expected win minus the expected loss. Thus, your expected profit is $4.50. Isn't that great!!!!
In the long run, you will win, even if the coin lands tails the first 20 times in a row, in the long run, it will land 50% of the time heads and you will have profit!!!
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