Bankroll Management - The Fundamentals

Lambert180 · March 2014

Alot of people post and ask abuot this and today I found myself stuck at the motorway services, broken down, on my own with nothing but a laptop to keep me company so thought I'd write this little guide. Sky feel free to move it somewhere/sticky it/move it to the blog/poker school bit or w/e if you want...

Bankroll Management

Let me start by saying that good bankroll management (BRM) really is one of the building blocks and an essential part of being a successful poker player in the long-term. Constantly we are told that short-term results are unimportant and we should concentrate on making the correct decisions, happy in the knowledge we are ‘winning’ long-term, but what good is this if we don’t have the bankroll behind us to give ourselves the chance to experience the long-term?

I’ll start by setting out some ‘base levels’ with regard to BRM for each format which we should all start from and then discuss the additional factors which may lead us to increasing or decreasing the ‘base level’.

Cash Poker – 30 Buy-ins

Sit ‘N’ Gos – 40 Buy-ins

MTTs - 75 Buy-ins

The above are good basic rules to stick to, but the following are factors which can increase or decrease the amount of buy-ins required:

The stakes you play – While it is not 100% true of all players, it is generally accepted that as you increase the stakes you play, the opposition will be tougher and more aggressive which will generally lead to you having a smaller edge and experiencing higher variance situations which leads to bigger swings in your results and means you need a larger BR.
The games you play – Which variant of poker you choose to play will have a large impact on the variance involved which in turns affects how large your bankroll needs to be. For instance, Omaha Hi/Lo will generally be the lowest variance form of the game (of the most commonly played) so the BRM requirements would be less than a game like Pot Limit Omaha where the ups and downs will be much larger.

Another aspect under game selection is what game type you play; DYMs are lower variance than HU SnGs and so would require less BIs, whereas MTTs with turbo structures will be higher variance than deepstacked MTTs and so would require a larger BR to play.
Your personal goals and circumstances – If you play for a living and intend to be withdrawing regularly then your BR is your livelihood and losing it takes away your ability to continue playing the game and earning a living. A recreational player may not see the money as a significant amount, and while this does not mean BRM should be disregarded, it does mean that if they are happy to potentially re-deposit then they can be less strict with the BRM requirements.
The number of players in your games – The less players there are at the table the higher the variance will be, so 10 handed games will be the lowest variance, while at the other end of the scale HU will be the highest variance.
Your win-rate - A marginal winner will experience larger downswings than a player with a higher win-rate and so will need a larger BR. If you are new to the game, you should probably increase your BR requirements as you will be less experienced and your win-rate will probably not be as high as you think it is, even if your early results have been positive. Remember, a losing player can never have a big enough BR, as they will always lose long-term, the only thing they can do is ensure their money lasts as long as possible.
Dropping Limits – If you are very disciplined and willing to drop down limits quickly if you are losing, then you can afford to have a smaller number of BIs for the stakes you play.

One very important thing to remember is that through good bankroll management strategy, we are not only trying to avoid ‘going broke’ but also the fear of going broke. Practising bad BRM can not only result in going bust, but can also lead to you ‘playing scared’ which means you could be playing too tight or too passively which can negatively impact your ability to beat the game.

For the vast majority of people, poker is and will always be a hobby which we play for fun so we should stick to playing at levels where it does not hurt to lose

Lambert180

jdsallstar · March 2014

excellent post Paul which I'm sure will be very useful to a lot of players

unknown_username · March 2014

+1 to above.Now if only I could practice the sound theory!

peter27 · March 2014

Great post, pretty much included everything that I have learnt the hard way

CraigSG1 · March 2014

Great post. I will just like to re-affirm this approach to players reading this.

GaryQQQ had two BR challanges and he stuck to a 40 BI rule while playing MTTs. He started with (i think) £40 and turned it into £1040 and then used 1000 PP's (started with FR's and then used real money) and turned that into £1000. I also had a challange diary and got £127 to £1000+ in 4 months, again by using this BI rule.

This goes to show that if your disciplined and not affraid to let ego get in the way then this is a very successful rule to follow.

For the vast amount of players we play this game for fun and winning money is a bonus. By using these BI rules we can make our money (and enjoyment) go further and give ourselves the best chance for success as well.

Another thing that these BI rules do, and was mentioned above, is to help spread the variance. Its no good putting close to all our BR on a cash table or into an MTT as this will make us play 'scared' poker and thats no fun is it? We want to play with as small a % as we can with our BR so we can concentrate in just having fun and playing the best we can without us worrying that losing will affect our ability to play again if we go bust.

Enjoy!

F_Ivanovic · March 2014

Good post. I do realise you were only covering the fundamentals but I think some stuff was missed out. One point being the number of tables you play because if you're playing 1 table it's unlikely you're going to lose more than 3/4BI's in one session whereas if you're playing 6+ tables you can easily have a downswing and lose 10BI's in one session.

Also with MTT's the type (B/H, normal) has an impact as well as how many runners. eg. a BH has less variance because often you will get back some of your BI if you knock one or more player out. And the more runners there are, the less likely you are to win one. So if you play a 4000 runner tournament with 50BI's you can easily go 20 tournaments in a row without cashing (greatly affecting your BR) whereas on sky with less runners it's v unlikely a good player will go that long without at least cashing. Plus you're much likely to get a big score on sky as opposed to a 4000 runner tournament.