I noticed there's theorycrafting going on here so I thought I could add in the guide I wrote a few months ago:
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How to calculate your CRIT value:
Your frost bolt does 456 avg dmg. (not the 446 its supposed to be, don't know why)
A solid preraid set of gear gives you spellpower of 400.
Full Raid consumes of +86 spellpower. (36 from Brilliant Wizard Oil and 35 Greater Arcane Elixir and 15 Elixir of Frost Power)
Frostbolt's spellpower coefficient is .814 (3/3.5 = .857 then .857*.95 = .814)
3/3.5 = cast time
5% reduction is because it has a slowing effect.
A few things we can ignore since we're trying to find equal values between crit and spellpower.
456 + (.814 coefficient * 486) = 852 dmg per frostbolt.
1% crit would over a long average be equal to 1% more damage per frost bolt. 852*.01 = 8.52 dmg.
8.52 / (spell coefficent = .814) = 10.46 Spellpower.
At this gear level 10.46 spellpower would be equal to 1% crit, and that would be the ratio you tradeoff your items for max theoretical DPS.
Now lets say you have better gear at a level of 450 Spellpower. +86 from Raid consumables.
1% crit = 10.96 SP
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How to value HIT:
You can't go above 16% hit (you get 6% from talents)
For spells, it is a 2 table roll. First the server rolls to see if you hit, then if you successfully landed your spell; it checks if you made a crit.
So 1 hit again, like crit adds 1% more damage per frostbolt in the long average, however this hit can cause a crit.
So a hit that would of missed, but this 1% hit changed it into successfully landing, this successful hit may now crit. So we need to take crit chance into calculation.
So 1 hit = [1% dmg of your frost bolt * your crit chance (5% base ~5% from gear 3% talents 10% WC = 23%)] / spell coefficient (.814)
OR 1 hit = [SP value of crit] * crit chance.
Gear: 400 SP +86 (from consumables) = 486.
852 dmg per frostbolt.
[8.52/.814 = 10.46] * 1.23 = 12.86 SP
At this gear level 12.86 spellpower would be equal to 1% hit, and that would be the ratio you tradeoff your items for max theoretical DPS.
Spellpower level: 450+86 = 536 SP
1% hit = 13.48 SP
The more spellpower you have, the more each crit and hit is worth.
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So you make tradeoffs on your items until you find your max DPS combination. If you want an item that is +15 sp OR 1% crit? You go with the 15 sp.
You want 8 sp OR 1 % hit? You go with the 1% hit.
Good luck!
I'm a huge theorycrafter so I was pretty excited by all this and looked through everything in this post
Now to look at some points i've seen through the thread:
Average frostbolt damage is 456. Not the 446 it is supposed to be - something server side they will fix eventually I'd guess. (Theorycraft says 486 but that is wrong)
Frostbolt coefficient is indeed ~.814
Looking through sumail's post I see that he varies his crit and hit ratio depending on how much he already has? For example .84/.83 (1% vs 0% hit) and .99/.98 ( 16 vs 15 hit), same for crit. When looking at equivalencies it doesn't work like that, you aren't looking to see by how much % it improves by, but by absolute #'s. A 1% hit increase from 1->2 is the same as 15->16. Getting more and more crit or hit shouldn't devalue the next one.
You put alot of work into it and took me a while to go through it (thankfully you put in end equations so I was able to skip some parts I didn't understand) I actually was able to fix one of my guide's problems by looking through yours

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Edit: Thanks guys for the explanations! I'll be looking to fixup my stuff.