A player's Elo rating is represented by a number, which increases or decreases based upon the outcome of games between rated players. After every game, the winning player takes points from the losing one. The total number of points gained or lost after a game is determined by the difference between the ratings of the winner and loser. In a series of games between a high-rated player and a low-rated player, the high-rated player is expected to score more wins. If the high-rated player wins, only a few rating points will be taken from the low-rated player. However, if the lower rated player scores an upset win, many rating points will be transferred. The lower rated player will also gain a few points from the higher rated player in the event of a draw. This makes the rating system self-correcting. A player whose rating is too low should, in the long run, do better than the rating system predicts, and thus gain rating points until the rating reflects the true playing strength.
Originally Posted by Dan
