To become a serious poker player, proper bankroll management is a must. We show you how to keep your bankroll heading in the right direction
Poker is a fickle mistress. We can all agree on that. You can run hotter than the sun and quickly turn a $50 deposit into several thousand. Then, thinking you’ve got the game licked, you move up in limits, your luck turns bad and before you know it you’ve lost it all. That’s because poker is a game with a lot of mathematical variance, which means big swings in your results even if you’re a winning player.
There are, however, two ways to avoid this. First, you become a minor TV celebrity, where all you have to do is learn the basic rules of hold’em and you’ll get bought into every big tournament going, risking none of your own money. Or second, you can practise the art of bankroll management. Now, we’re going to take a wild stab in the dark here, but we’re guessing 99 percent of you will have to go for the second option, so read on…
Bankroll management is what makes the difference between being a winning player in the long-term and being tossed on the poker scrap heap (like the aforementioned C-list celebs). The fascinating thing is many of the top players you see on TV have never practised it. However, a new generation of young internet pros are operating strict bankroll management rules to build their accounts and secure themselves financially for life.
Opening an account
We’re sure there are a few questions buzzing around your head now: What is bankroll management? What advantages does it bring? How does it apply to you? Okay, let’s start with the basics. Your bankroll is your money for playing poker. It should be completely separate from any other money in your life. It is possible to withdraw winnings at any point, but, in order to keep careful track of your results, you should never conflate your bankroll with other monies.
How much attention you give to the state of your bankroll should be completely dependent on your goals in poker. If poker is something you do for fun, to let off steam at the end of the working week, then bankroll management is irrelevant to you to a large degree. If you’re not serious about considering yourself a winning player and poker is just entertainment, you can play for whatever sum of money you’re comfortable risking as ‘payment’ for your hobby. However, if you have more serious poker goals, understanding how to finance your play is crucial.
Bankroll management basically uses some mathematical rules to establish how much of your money for poker you should play for at any one time. If you’re a winning poker player you have an edge over the games you play in. Essentially you’re investing money with a positive expectation. This means you don’t expect to win every time you play, but you do expect to win in the long run.
The problem is that even the best player on the planet can get all his money in as a big favourite only for his (inferior) opponent to get lucky and bust him. In other words, you can have an edge over the game but still go broke. Which is where bankroll management comes in. By breaking your poker money down into much smaller pieces, if you do get unlucky and go broke in a particular game it shouldn’t affect your overall fortunes. And in the long run, this means your bankroll should steadily increase.
It’s worth noting that these thoughts only have any relevance if you are a winning player – i.e. you have an edge on the game. If you’re a losing player it could be argued that you should play for all your money in one game. This is because in just one session you might get lucky, whereas over many games your losing edge will grind you down.
Perfect balance
So how much of your money should you risk? In simple terms, the smaller the percentage you risk the less likely you are to go broke but, inevitably, it will be a harder and more protracted process to increase your overall bankroll. There’s a need then to balance your edge over the game against the mathematical variance in poker, which affects us all.
Fortunately some very clever, very mathematical and, some might say, very geeky people have already worked all this out. From the work they have done, take the following guidelines and stick to them religiously. First, in no-limit Hold’em cash games never risk more than five percent of your bankroll. In other words make sure you have 20 buy-ins (in a 100 big blinds max. game) for the level you’re playing at.
This figure assumes a decent win rate (something like five big blinds per 100 hands if you use tracking software) and a normal standard deviation in the game. If your eyes just glazed over, don’t panic. Just understand that minimising your buy-ins to this level will give you the optimal balance between staking enough to grow your stack and preventing yourself from going broke.
Second, for multi-table tournaments limit yourself to buy-ins that equate to two percent of your bankroll and 30 buy-ins for single-table tournaments. These are relatively conservative guidelines but they will give you good protection against going bust should you go on a bad run.
Using this system does not mean you will inexorably build your bankroll. In fact it’s important that you’re prepared to drop down in limits if you encounter a losing run. For example, if you have $2,000 and are playing $0.50/$1 no-limit Hold’em but have a losing run when your bankroll falls to just over 10 buy-ins, you should seriously consider dropping down in limits, where your $1,000 will see you adequately rolled for $0.25/$0.50.
This does of course take discipline and requires you leaving your pride at the door. But many a poker player has gone bust because of their ego. Downswings are a natural part of the game and some of the best in the world have had to drop down in limits for a time on their way to the top.
Pot shots
Despite what we’ve just preached it is possible to ‘take shots’ at a higher level of play before you have an adequate bankroll. Many of the players at the highest echelons of poker have taken shots that have worked out for them in their careers. Some love to live on the edge and will play for all the money in their pockets in the highest game they can.
That’s fine for some but most of you have no desire to go broke. But it is understandable that you should want to test your mettle in a game you’re not properly financed for. To do this, simply set aside a portion of your bankroll, adhere to the following rules and you’ll keep yourself safe.
For instance, let’s say you’re comfortably beating $1/$2 games and have $6,000 (30x $200 buy-ins). You could take a shot at the $2/$4 level with $2,000 of this roll. If you run well you could soon have enough to play regularly at this level. Should things go, ahem, not so well, you will still be adequately bankrolled for a game you know you can beat.
Unfortunately, the reality is that most players don’t inexorably build their bankroll until they reach the biggest games, even if they do adhere to a strict bankroll management system. Many players reach a pain threshold where the money involved becomes too real and they’re out of their comfort zone. Suddenly, losing $5,000 in a game isn’t losing five buy-ins – it’s losing a few months’ worth of mortgage payments.
In the end though, the biggest factor dictating a winning player’s level is quite simply their ability at the game. Once you’ve taken enough shots at the level above to know you can’t reliably beat it and earn a regular win rate, the desire to move up will probably start to fade.
However, if you do have ambitions to play at the top levels of the game, have the talent and work hard enough, then managing your bankroll is as essential to you as the North Star was to sailors of old.
Cashing out
Withdrawing funds from your bankroll has the upside of giving you real money to spend on things, but has the drawback of reversing the growth of your bankroll. If you’re playing poker for a living you’ll have to take money out of your roll to pay bills, buy food and, well, simply exist. As a consequence, to move up limits you would have to make enough money to live on and build your bankroll at the same time. This can be a tough task.
If you’re a recreational player you may decide you want to take some winnings and use the money for something fun. There is nothing wrong with that – you have to enjoy yourself after all – but remember that if you want to jump straight back into the same stakes again there’s a chance you will lose the money that you’ve just splurged on other things.
In the final analysis, the vast majority of people don’t have the discipline or desire to rigorously put in place good bankroll management measures. Most poker players don’t like to grind and keep accounts – they like to take shots and splash winnings around. You must decide what approach is right for your goals in poker and remember that if you don’t play within your bankroll, you’re gambling. You may be gambling with an edge but you must be prepared to go broke.
