Bankroll Management – The Key to Long-term Success

Money management is important in all walks of life, but especially in poker. Manage your bankroll wisely and you don’t have to stress about variance, manage it poorly and you will go bust

Many gifted poker players have come and gone, fading away into obscurity. Why? Because they failed to manage their bankroll. Luck or ‘variance’ as we call it in poker, works both ways. Sometimes it runs in your favor sometimes it doesn’t, though in the long run it should even out. 

Money Management

That’s why it’s important to exercise good bankroll management if you are serious about playing. Over a small sample size variance plays a massive role in determining profit or loss and is beyond your control, regardless of your level of skill. Say you were playing with a bankroll of five buy-ins (each buy-in equal to 100 big blinds) and were the tightest player on earth, only getting your money in as a 60%+ favorite. Is it possible to lose all five times? Absolutely. While the chances of that happening are around 200-1 making it improbable, it is not impossible. 

You need to have around 25-30 full buy-ins for the stakes you play in order to be sufficiently rolled. You may think this overly cautious, but variance is higher in six-max online cash games as the action is more aggressive. The same can be said of live games where players sit on deep stacks of 200BB or more, meaning the swings can be much greater. 

Stop-loss

Another important principle is setting a stop-loss and being disciplined enough to stick to it. When you lose over a certain amount there is a temptation to start chasing, playing more recklessly, and abandoning your usual logical thought process (tilting). Effectively you are not playing poker – you’re gambling and chances are you’ll lose. This can also affect your confidence and make you play ‘scared’ meaning you lose more. It’s important to recognize your own tendencies and accept that even the best players are prone to tilt. Take a step back, think logically, and quit. Poker will be there tomorrow and there will be other days when the games are juicy. The fish who took your money isn’t the only fish out there. It’s more important to live to fight another day.

Taking Shots

Speaking of juicy games, sometimes you will feel the urge to take a shot above your usual stakes. By all means, do so, but bear in mind bankroll management. You will experience more variance when playing higher so mentally set aside an amount of money you are prepared to lose. If you lose that amount quit immediately, and resist the temptation to reload. This way, you will be able to go back to your usual stakes with your bankroll relatively undamaged. Taking shots is recommended only if you are a solid, winning player disciplined enough to grasp the bigger picture of bankroll management at all times. If you fail to manage your bankroll it doesn’t matter how much of an edge you have. For example, if you and I were to bet on a series of coin flips and you were to pay me $1 when I won, but I had to pay you $1.20 when you won, you have a 20% edge. If we were to flip this coin 100 times you should show a profit. In fact, the more times we flipped the coin, the more your profit would increase. 

However, if we raised the stakes, and flipped for $10,000 versus $12,000, it’d be a different story. Losing three flips in a row would set you back $30,000, and if you didn’t have enough of a bankroll to sustain these swings you would never get to see the long run and not be able to realise your expected value.

In Conclusion

If you want to make money in poker, bankroll management is the most important skill to master. If you can develop the discipline to manage your money, variance and tilt will not be able to get the best of you. They might knock you down, but you’ll always get back up.

Golden Rules For Bankroll Management

No Limit Hold’em cash games: 25-30 buy-ins

Pot Limit Omaha cash games: 40-50 buy-ins

Sit-and-Go tournaments: 40 buy-ins

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