Calculating Outs / Odds
Your "outs" are the number of cards left in the deck that will improve your hand. For an example, say you have an AK of hearts and the flop comes with 2 hearts and no pairs on board. You need one heart to make your flush. There are 13 hearts total in the deck. You have seen 4 of them (2 in your hand, and 2 on the board), so there are 9 hearts left in the deck. There are 52 cards total in the deck, you have seen 5 (your hand and the flop), so that leaves 47 cards. Of the 47 cards, 38 are not hearts and 9 are. So your odds of hitting a heart on the next card are 38:9, or approximately 4:1. To determine your odds of making your hand by the river, cut the odds in half (since you have two chances to hit). So your odds of making your flush by the river are approximately 2:1 (two to one).
Pot Odds
Pot odds is the ratio between the bet you must call compared to the size of the pot. So if the pot is currently $100 and you must call a $50 bet to see the next card, your odds are 100:50 or 2:1 (two to one).
Phil Gordon provides an easy way to calculate odds in the following video:
Purchase Phil Gordon's Final Table Poker DVD
Making Decisions
As a general rule, if your pot odds are greater than the odds of making your hand, you should call. If not, you should fold. You must get good at calculating your outs and odds as you will need this information during every hand.
To simplify the process, I use a tool called Tournament Indicator which calculates this information for me on the fly. This way I can focus my attention on the situation at the table instead of working on the math in my head. In the example below you are drawing to an inside straight draw--a 6 will give you the straight. Tournament Indicator shows you the odds of making your straight and your pot odds. Usually, if your pot odds are better than the odds of making your straight, you should call. Otherwise, you should fold. I will get into the exceptions in the Advanced Lessons to follow.
