The term bankroll management in poker is used to describe the amount of money one would need to play certain limits. Management also means setting guidelines or parameters to make sure we keep our bankroll. You could be one of the best players in the world, but without proper bankroll management you could go broke. This skill or rule is crucial for a poker player's success and survival.
If you only play poker once in a blue moon than you will not need to know any of this information. The only rule for you is to only play with what you can afford to lose. If you want to take poker seriously which you are since your reading this article, this information is very important.
Poker can be nice little income aside from your real job. I got my start by playing part time and working full time. Using proper bankroll management and honing my skills, I slowly started playing more and working less. I owe a good bit of my success to using solid management skills and setting limits for myself.
Let's start by talking about what bad management is. Bad bankroll management can be used to describe almost every poker player. Only the top percent really use proper management. Your average player will have a few bucks to spare and use the majority of it to play one tournament or play the highest limit cash game they can buy in to. This is always a recipe for disaster in the long run. I can't tell you how many times someone asks me to borrow $100 so they can play a $100 tournament. These people will always be asking for money since they will lose the majority of the time and are always using every last cent to play the highest game they can possibly play.
Why Bankroll Management is so important
The reality in poker is we will not win all the time. We go on heaters where it seems we can't lose. But, we also go on downswings where it seems like we can never win. This is just a fact and there's no getting around it. I don't care who you are and how good you are, you will lose a good percentage of the time. A recurring theme in my articles is long term. Poker is a game of long term results. In the end we win more than we lose since we have a skill advantage over our opponents. By using proper bankroll management we ensure that we always have money to play our game.
Money is a tool
A mechanic uses tools for his job. Without these tools he can't work and make any money to support himself or his family. If we look at money as a tool rather than actually having any monetary value it will make your life much easier. If we have no money we can't play and we can't make more money. It's not an easy concept to grasp for some, but the sooner you lose all disregards for money and think of it as a tool for your success, you will already have an edge on most.
The first step towards bankroll management is deciding how much you can afford to lose. It doesn't matter if its $100 or $1,000. Just make sure you will be ok in your life if you lose this money. Once you have your tools in place we can now begin to set our limits and bankroll rules.
Since most people play tournaments we will start off by discussing proper tournament bankroll management. A good rule of thumb is to use %3 of your bankroll at any given time. You will need a larger bankroll for tournaments than cash games. The variance or times we lose in tournaments is greater than in a cash game.
A %3 bankroll management system would look something like this. If we have a starting bankroll of $100, the highest buy in tournament we can play is $3. If we have $200, we can play a $6 tournament and so on. Some people will be a little more aggressive, but I don't recommend going much higher. It's ok to take a shot at slightly higher buy in on occasion and I actually recommend this. As long as we are ahead overall with our bankroll it's totally fine to take a shot at hitting a big score.
Cash game bankroll
With cash games our management system will be slightly different. Instead of using a percentage, we will be using a set number of buy ins. Since tournaments have different buy ins we need to be using a percentage. When we play cash games we are usually playing a certain limit and our buy in is always the same, so we can use a set number of these buy ins to determine what we can play.
Having at least 30 buy ins for a specific limit is ideal for cash games. For example we would need $300 to play 10nl. Since 10nl has a buy in of $10 this make 30 buy ins. Once we win and work our way up to $500 we can start playing 25nl. Keep moving up the ranks per your bankroll and your bankroll will be fine.
At lower limits it's ok to have a little less since the players are overall weaker and we will more often at these limits. Once you start playing higher limits and the players are better, the variance will be greater and we will need to stick with our original plan. Again, as with our tournament bankroll, it's ok to take a shot at higher limit once in a while. If you spot a juicy game, go for it. Just don't risk your entire roll in one game. Take a buy in or two and try to increase your bankroll so that we can play higher limits and win more money.
Reinvest or pay yourself?
One very important aspect of bankroll management is making money for you. Each player has a unique living situation and their expenses will vary. If you can afford to, keep all your winnings when you start out and add it back into your bankroll. This will allow you to move up limits faster to start making more money. If you need the money for bills or whatever, pay yourself a certain amount. Just make sure you have enough to continue playing the limits you're currently at. If you win $100 in a night take half of it for yourself and the rest put back in your roll. It's an investment for your future and should be treated as such.
Up and Down
Just as its important to be moving up in limits to make more money, it's more important to make sure we move down when losing. When we do hit that inevitable downswing, we must move down in limits if our bankroll gets too small. If we have $600 and are playing 25nl and go on a bad run we must move down once we reach our threshold. If we are left with $400 at the end of a session, the next time we play should be at 10nl until we are back up to $500. This is possibly more important then moving up. If we stick with a limit and are losing, our bankroll will dwindle much faster. Think of it as consolidation, we are preserving our assets and trying to slow the leak. After time we will start winning again and be right back on track.
Some side notes
These rules are not to be set in stone and can vary upon many factors. This is a general outline and im sure throughout your poker wanderings you will hear different ideas from everyone. We all have different needs and resources. You should never deviate far from this plan however. Sometimes it will be ok to use 4 or 5 percent of your bankroll for tournaments if you are a better player or have more funds in reserve. The changes you make can be slight, but should always be in place. If you are s losing player no bankroll will be big enough and no management will save you. First you need to figure out how to win before you start managing your money.
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