Based on all tournament games.
Details in Tooltips
First, the initial Elo for every player is estimated. We do this here based on the number of games he played and how many tournaments he attended.
Then, all tournament games are evaluated in order of time: For every played game within a series, the winner takes points from the loser according to the Elo formula:
To understand how a player ended up on his current Elo, just view his/her game history by clicking on the name.
Instead of manually having to decide which match, tournament or opponent was important or difficult, Elo automatically takes care of the point distribution and is free of personal bias. The more matches are included, the more accurate it gets.
Elo automatically weights recent results heavier than older ones. This way, we can also measure at what point in time a player's Elo was higher or lower during is career (see the player profiles).
If a strong player (i.e. a player with a high Elo number) wins against a weaker opponent, he is only awarded a small number of points. However, if the weaker player wins, he gets alot. This way, the Elo difference of two players stabilizes given enough matches, reflecting the true "skill gap".