Any poker player who's been around the table a few times knows the importance of position but comparatively few know about - or account for - relative position. Unlike position, relative position is only a consideration in certain circumstances, most notably when a pre-flop raiser makes a continuation bet.
Here's why: relative position refers to your position in regards to the person who raises pre-flop.
When we are referring to standard poker position, being the last person to act is most advantageous because it gives us an information advantage, allowing us to see how other players are going to act before we have to make our move.
When it comes to relative position, your actual position at the table is not as important as your position in relation to the pre-flop raiser - and it's better to be the player to the immediate right of the pre-flop raiser than it is to be the player to the left. This is because the pre-flop raiser restarts the round of actions and it’s therefore the player to the right of this player who closes out the cycle – not the player to the left.
The Importance of Relative Position
To realize the importance of relative position, it's first important to look at actual position and how it drives the action.
Consider this: If a player makes a flop bet, it effectively restarts the cycle of action for all players who are in the hand.
So, for example, if Player 1 bets, and Player 2 folds and Player 3 calls, it's Player 3 who closes out of the action. Player 3 is last to act and has the 'information advantage' since he gets to see how all the other players are going to play their hands, and therefore can glean from their actions the merits of their hands.
However, if we look at how the same situation plays out if Player 2 were to bet, we encounter the implications of relative position.
Here’s what I mean:
Player 1 checks, Player 2 bets (restarting the cycle), Player 3 calls and then it falls to Player 1 to act again. As such, Player 1 closes the action and is last to act in relative position even though Player 3 is in the actual last position.
Sometimes, this won't be a big deal. After all, assuming we are Player 3, we still get to observe the actions of our opponents before it's our turn. This won't always be the case though. As mentioned, continuation bets - and by extension, pre-flop raises - make considering relative position crucial.
Note: In situations where the pot is very multi-way, pre-flop raises will often be less inclined to c-bet and thus relative position becomes less important.
Relative Position and Continuation Betting
A pre-flop raiser will often make a continuation bet on the flop in the event they are first to act or if the other players check ahead of them. (Many players will expect the player who raises pre-flop to make a c-bet, and will therefore check to them.) If you are the player set to act after the pre-flop raiser who makes the continuation bet and there are players left to act after you, you are in a tough spot. (Remember, by making a c-bet, the pre-flop raiser has reset the cycle of action.) The players who are left to act could have any range of hands - just because they checked to the pre-flop raiser doesn't necessarily mean they are without their holdings. Now you find yourself stuck between the c-bettor, who could have a monster hand, and the player(s) who checked to the c-bettor and could have almost any quality of hand. You simply don't know. You may be in last position, but if your relative position falls to the immediate left of the pre-flop raiser, you aren't actually the last to act and you don't get to see how the player(s) who checked previously will act before you have to make your move.
Planning for the Unavoidable
You can't avoid being put in a tight squeeze thanks to relative position, but you can be aware of the potentially weighty implications of this spot and use this information to play your hand as advantageously as possible. Again, remember if you are to the left of the pre-flop raiser, be cautious; you don't have the information advantage anymore. Conversely, if you are seated to the right of the pre-flop raiser, you are in the best relative position regardless of your actual position at the table. From this vantage, you get to see how your opponents are going to play their hands and you can use this intel to make the best decision for your hand.