Fold

A player is said to be folding their hand if they discard it when it is their turn to take an action in a betting round. In most poker games, folding is done by returning the hand to the dealer, or by placing it in the muck yourself. Folding does not cost the player anything in money, but also does not gain the player anything monetarily. Once a player has folded, they may no longer rejoin the hand; any money they had previously bet into the pot is left there for the remaining players to win. This money (abandoned by its original bettor) is called dead money.

How to fold
Folding should be done without revealing your cards. To do otherwise is against the rules and is considered rude in poker etiquette. If a player folds their hand face up, the other players get additional information about what cards are dead and what cards are still live, and this additional information may affect later betting or game play (a player on a draw may subsequently fold if they see another player fold one of their outs face up, for example). If a fold is done in such a way that only some players at the table could see the cards being folded (e.g. they flipped up on edge, facing one end of the table, then fell back facedown), the dealer is responsible for ensuring that all players have an equal opportunity to know what cards were folded. If a still-active player suspects that some other player has seen a folded card, they may request the dealer to show it to everyone, under the common "show one, show all" rule. Generally speaking, however, hands which are folded by a player are not shown to other players, and other players do not have a right to see them.


 * Note that this is different from a hand which is not folded but is merely mucked at the showdown by a player who feels they did not win; such hands are usually subject to the "I want to see that hand" rule, a common rule in poker rooms that lets players at a table see mucked (but not folded) hands in certain situations. A hand is folded at the showdown only if it was mucked in turn when the player had a choice of action to take.  If the player checks or calls at that time, then that is their action, and a subsequent mucking of the hand does not mean it was folded; it was merely mucked.

In variants with upcards such as 7-Stud, folding is done by first turning your upcards over, facedown, and then returning them to the dealer or the muck. Note that in these variants, it is often against the rules (and is always inconsiderate) to fold out of turn, since hiding your upcards prior to someone being able to act deprives them of information which other players may have seen.

Strategy
Folding is often "the most powerful tool in your poker toolbox". One of the key elements to winning at poker is to limit your losses (thus making sure you lose less than you win), and you can only do that by folding losing hands before they cost you a lot of money.

The trick, of course, is determining when you have a losing hand. But the sooner you can fold a losing hand (in the face of a bet, of course), the less money you lose with it and the more your net winnings will go up.

Most beginning players play far too many hands (see starting hand selection) and stay in with those hands far too long, calling bets in hopes of cacthing a gutshot straight instead of folding their drawing hand when it isn't profitable to play it. Folding is one of the first acts you need to study in order to make money at poker, and as a starting rule of thumb you should probably fold much more frequently than you are doing now.