Simply put, ICM is, as most poker terms are, an acronym. Standing for Independent Chip Model is a mathematical model or calculation that enables anyone to convert a tournament chip stack into a monetary value of their equity based on the remaining prize pool.
Last year Fedor pulled together an ICM Study session for Pokercode. ICM is almost an odd topic of running a session purely because most tournament poker players would consider themselves to have a fundamental understanding of ICM.
Fedor put the task to the group to explain ICM, most members gave a different answer, and arguably none were incorrect in their response.
ICM isn’t a standard part of Tournament poker, at least not from a rule perspective, so why do we use it?
For all examples, we will use No-limit Holdem as currently, this is the most played poker tournament game type played worldwide.
Well, in poker, we’re always looking to optimise our play to make the most profit.
So this optimisation is all about payouts. As payouts become part of decisions, the environment has changed. Ultimately the optimum strategy for playing NLH will shift in that position or stack depth cause a shift in strategy.
Failing to account for payouts means this change in environment is ignored. A player will not adapt their strategy and miss out on EV, specifically in scenarios that cost the most money, like deeper tournaments or Final Tables.
In short, not very. ICM is a simplified model that approximates a very complex situation.
It isn’t a solution; it is a concept that helps us as the general population better understand how payouts shift the environment.
So before we run through the ICM calculation, we’re looking at something more straightforward, Chip-EV.
Chip-EV assumes, without edge, that any split is equal. We’ll use an example to demonstrate:
Three players remain in a tournament that only has a prize for first place of $1,000. Their current stacks are:
So in this example the total chips in play are 1,000 and the prize pool is $1,000. So an equal split would mean each player receives $1 for every chip in their stack:
So unlike Chip-EV, the ICM Calculation is a little more complex. Trying to follow the whole equation is time-consuming and ultimately unnecessary.
There are calculators available online that can quickly run for you with the two required data points of stack sizes & payouts. As mentioned, this is a simplified approximation to a complex situation, so getting stuck into calculating things manually is time that could be better spent elsewhere in the poker study lab.
In the video below, Fedor Holz doe’s a great job at a high level of explaining how the ICM model works, and I think you would be better served with Fedor articulating this to you than I am butchering it in the written text.
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