How do you manage your bankroll?

[el_grande]

OK, I'm familiar with the 300BB bankroll idea. I use it. Well, maybe I use more like 200BB, but I play on party. :-)
Mathematically, 300BB is supposed to keep you afloat as long as you are playing fairly well.

Let's say you move up a level. I just did this. I started with $100 at party playing $.5/$1 and ran it up to $500, where I switched to $1/$2. Now I just started playing $2/$4 and my BR is 300BB for that.

I would not have started playing $2/$4 with 150BB, so what happens if I go on a horrible streak and drop to 150BB? I'd be in a situation where I'm playing a game too rich for my BR. So if you were in this situation, would you drop down a level? How low do you have to get to do this?

Is there a modification to the simple 300BB rule where you regress to previous levels when you hit a certain BR? Should there be?

[cocarondelle]

one time i was up to 400 dollars and then dropped to 315. i got pissed so tried my luck at blackjack and dropped back down to 140. now im hovering around 300. So i guess not playing blackjack when your down on your luck is one way to manage bankroll /images/graemlins/smile.gif

[SomethingClever]

I don't know if there's a hard-and-fast rule that people stick to, but if I had 300 BB at a level, and I dropped 150 BB, yes, I'd drop down.

[Jaquen H'gar]

If 300 BB's is the "optimal" bankroll (an assumption I don't necessarily hold), then for optimal growth of the bankroll, one should continually resize their bets to match their changing bankroll. i.e., if the bankroll drops by 50%, then the bets should drop by 50%. If the bankroll grows by 50%, then the bets should increase by 50%. Ideally, this changing of bets should occur after every session but of course this isn't practical since betting limits are predefined - $.50, $1, $2, $3, $5, etc.

Example: bankroll is $1200 thus indicated game is $2/4. If bankroll drops to $900, then ideally the game should be $1.50/3.00 but there is no such game so keep at 2/4 until bankroll drops to $600 then cutback to $1/2. If bankroll grows and reaches $1800 then jump to $3/6, etc.

If the fractional betting limits were available and the bets resized after every hand, this would theoretically be the fastest way to grow your bankroll so the best practical idea would be to follow this model as closely as possible. This assumes the 300 BB rule, of course.

[madcaller]

The 300BB bankroll comes from a combination of Kelly betting theory and risk of ruin calculations. Here are a couple of links that are interesting:

http://www.bjmath.com/bjmath/refer/RevGROR.htm
http://www.bjmath.com/bjmath/refer/CalcGROR.htm
http://www.bjmath.com/main.htm

I would use a 300BB bankroll and move down at a minimum when your bankroll drops to 200BB. Of course this all depends on your win rate. The higher the win rate the more flexibility you have with bankroll size. However, if you are not a winning player you will need and infinite bankroll.

[Michael Davis]

I like to take risks, so I'm often calling for the hit & run, suicide squeeze, and hidden ball trick.

-Michael

[www.portal2poker.com]

I would play till i was broke and start over again at .5/1

[garyc8]

You should probably calculate your win rate, and your standard deviation. This will give you a better idea what your bankroll requirements are.

[Andy B]

I think the notion of maintaining a 300 BB bankroll to play $2/4 is absurd. Clearly, you're not playing for a living, so going broke isn't the disaster that it would be if you were. A reasonable buy-in for $2/4 is $100. How hard is it going to be for you to come up with another $100 if you throw off your bankroll?

If I had needed 150 BB to play in a game, I would never have been able to play anything.

[sammy_g]

[ QUOTE ]
I would use a 300BB bankroll and move down at a minimum when your bankroll drops to 200BB.

[/ QUOTE ]
Maybe someone can clear something up for me. I thought the whole point of 300BB is so that you can absorb any swings *without* moving down in limits if you know you are a winning player. If you are disciplined enough to move down in limits after losing 100BB, shouldn't you be able to get by with less?

One problem I see is if you are new to a limit, you don't know your win rate. If you don't know your win rate, you can't really calculate what bankroll you need. You can't play at a new limit until you know you are properly bankrolled. Sort of a chicken/egg problem.

[BarronVangorToth]

Andy has a good point here.... Playing for a living and playing as a side venture are two entirely different things.

For example, I can sit down at the Foxwoods 20/40 anytime I want (read: when the game is insanely weak) -- even though I don't have $12,000 specifically set aside in my pocket to play poker.

Nor do I have a bank account somewhere labeled "poker" with $12,000 in it.

I have money and can play whatever game I want up to a certain level if the situation arises, especially since I know I've made X dollars this year so even if I take a stab at a higher game, even a $75/$150, it won't mean too much to my overall winnings for the year.

This is yet another terrific example where accurate record keeping comes in handy -- especially when my poker winnings invariably get spent on DVDs, groceries, sporting events, vacations, or giving my parents extra cash if they are short when I visit them.

The way I see it, there are at least three very different scenarios:

Person with finite funds that has limited poker budget. Let's say you're in college and scrounging for extra dollars like most of us were at University. Well, you got $200 set aside for poker. I would NOT recommend that this person plays $5/$10 ... however, going back to me, I've been out with friends and I've sat down at $10/$20 with $200 in my pocket because I know if something goes horribly wrong, the ATM is just 100 feet away. This isn't an option for some. For those that it isn't an option for ... I think 200-300 BB isn't unreasonable to have to play at X level, and gradually work your way up.

Situation 2 is my own ... talked about it enough. Many of us are in it, where we play poker for extra spending money and we have real work where we make our real money.

Situation 3 is the poker professional, playing for a majority of his income, where he needs to win X dollars just to pay his monthly expenses ... these guys need to manage their bankroll even more than most, because if I go a month and only win $100 -- Oh, well, I made $100 and it's my hobby, and as I believe good ol' Dr. Al has said, a lot of hobbies cost money, and if mine made me $100, good for me.

However, the poker pro who requires $3,000 per month just for his expenses ... him making $100 in the month is in essence losing $2900 ... which comes out of the bankroll.

All different scenarios; all require different mindsets.


Barron Vangor Toth
www.BarronVangorToth.com (http://www.BarronVangorToth.com)

[fnord_too]

[ QUOTE ]
[ QUOTE ]
I would use a 300BB bankroll and move down at a minimum when your bankroll drops to 200BB.

[/ QUOTE ]
Maybe someone can clear something up for me. I thought the whole point of 300BB is so that you can absorb any swings *without* moving down in limits if you know you are a winning player. If you are disciplined enough to move down in limits after losing 100BB, shouldn't you be able to get by with less?

One problem I see is if you are new to a limit, you don't know your win rate. If you don't know your win rate, you can't really calculate what bankroll you need. You can't play at a new limit until you know you are properly bankrolled. Sort of a chicken/egg problem.

[/ QUOTE ]

I don't know if this will clear it up, but here is how I look at it. If you have a risk of ruin (RoR) of 1% with a 300BB BR and 10% with a 150BB BR, when you hit 150BB you have a 10% RoR regardless of where you started. (You can look at this and say "well duh" or you could show it using Bayes Theorem).

Now (I'm winging it here) lets calculate the risk of dropping 150BB given the above assumptions (1% RoR for 300BB, 10% for 150BB, the latter number pulled completely out of my nether regions).

Call the Probability of loosing 150BB P(H), call the probability of losing 300 BB P(F) (the H is for half, and F is for full).

So, given P(F) = .01, and P(F|H) = .10, what is P(H)?

By Bayes Theorem P(F|H) = [P(H|F)*P(F)]/P(H), P(H|F) = 1, since you have to lose half of your bankroll to lose all of it.

So, .10 = .01/P(H) ==> P(H) = .10, which makes sense.

So, you have a 10% probability of losing half your bankroll, and if you do lose half you bankroll you have a 10% probabiliyt of going bust if you stay at the same limit.

If you drop back at 150BB, and your win rate, SD is the same at the lower limit (half of the limit you are playing at), you now again have a 10% chance of losing half your BR and a 10% chance of going bust if you continue at that level.

So, say you are playing 4/8 with 300BB, and there are 2/4 and 1/2 games available to you, and you have the same bb/100 and sd in all of these. If your strategy is to play only 4/8 and you hit 150BB, you have a 10% chance of going bust (still 1% overall).

If instead your strategy is to drop back to 2/4 if you hit 150BB, then drop back again to 1/2 if you hit 150BB at the new level, you RoR is now .0001, or .01%.

This is because you only go bust if you bust out at the 1/2 level (.01), which you will only get to if you drop 150BB at the 2/4 level (.1), which you only get to if you drop 150BB at the 4/8 level (.1). So, we get a RoR of .1*.1*.01 = .0001.

If you have a RoR model, and win rate / standard deviation for each level, you can calculate your exact RoR given whatever strategy you employ.

Note, these are really worst case calculations, since in most cases you will never drop to 150BB if your RoR with 300BB is sufficiently low.

Also note that if dropping back is not a real option (i.e. you depend on the income you make from poker, and income from a lower limit will not suffice), you can also reduce risk by increasing bank roll.

Final note, I have never done RoR calculations, I just know (I think) how to play with the probabilities that come out of them.

Hope this helps.

[sammy_g]

Thanks. It looks like you've shown mathematically what is actually somewhat intuitive once you think about it.

- If you start with a large bankroll (300BB), your risk of ruin is small.

- If you are unlucky and lose half of your bankroll, your risk of ruin greatly increases. Still, if you keep playing you will usually be able to turn it around.

- If you're willing to drop down in limits each time you lose a certain amount, your risk of ruin is tiny -- almost nonexistent.

Of course, this assumes you are a winning player at the limits you play. One practical argument for dropping down is that if you lose 150BB there's only a 10% chance you were just unlucky and a 90% chance that you are not really a winning player at that limit.

By the way, I haven't bought Gambling Theory and Other Topics yet, although I plan to. What win rate and standard deviation was used to come up with the magic 300BB number?

[jason1990]

[ QUOTE ]
What win rate and standard deviation was used to come up with the magic 300BB number?

[/ QUOTE ]

This is a good question which, hopefully, someone else will have the answer to. (I do not.) However, I do know this: a reasonable formula which relates RoR (p), winrate (u) in BB/100, SD (s) in BB/100, and starting bankroll (b) in BB is

-[s^2/(2u)]*log p = b.

(Here "log" is the natural logarithm.) So we see that there is an infinite number of ordered triples (s,u,p) which can produce the value b = 300. For example, if you want to have a RoR of 1% (p = .01) and a starting bankroll of b = 300, then your winrate and SD should satisfy

s^2/(2u) = -b/(log p) = 65.14.

If your winrate is u = 3, then your SD should not be larger than s = sqrt(6*65.14) = 19.8. But if your winrate is u = 2, then your SD should not be larger than s = sqrt(4*65.14) = 16.1. Or, if your SD is s = 18, then the you need a winrate of at least u = 18^2/(2*65.14) = 2.5. But with a SD of s = 15, you only need a winrate of u = 15^2/(2*65.14) = 1.7.

This is all just an approximation and probably only interesting on a theoretical level, but hopefully it will give you something to play with.

[LetsRock]

In theory, there should not be a problem with dropping half of your bankroll. That's why it's so big to begin with, to allow for brutal swings. The 300x factor haas been determined to be enough to handle the worst of possible swings.

This, of course, is assuming that you are making few mistakes and your losses are truly due to bad luck.

But, if you are uncomfortable that the size of your BR is not enough for the stake you're playing, then you should move down to a level that is comfortable for you. IF ouy're not comofrtable, you're likely to make more mistakes playing with your "scared" money.

[GuyOnTilt]

Hey guys,

Apparently I manage my bankroll different from everybody else. I like keeping a bigger bankroll than most, but I guess I've never really told anybody why. Soooooo, now I will: so I don't ever have to step down in limits. Personally, I'm not concerned AT ALL with losing my bankroll. I really think it's pretty much mathematically impossible for that to happen. But if I wanted to plug my numbers into a RoR forumla, here's how I'd do it:

Right now I'm playing 15/30 online and I have around 1000 big bets dedicated to my poker bankroll. If that number ever drops down to 400 (-600 BB's), I will step down to 10/20. That would give me 600 BB's for 10/20, where I would play until my br dropped to 300 BB's (-300 BB's). If that happened, I'd drop to 5/10 with 600 BB's and play till my br dropped to 300 BB's (-300 BB's). That would give me 500 BB's for 3/6. That process would go on, but I'll just stop there. I'd have to have a 1200 BB downswing to drop to 3/6, and I'd still have 500 BB's for that level if that ever did happen. So basically, me going broke ain't gonna happen. So I don't really care to figuring out my RoR or even worrying about it one bit.

What I do worry about though is having to drop down in limits. I just don't want that to happen. So like I said, I'd drop down if I ever only had 400 BB's for my current level. That would mean a 600 BB downswing (I maintain a 1000 BB br for poker). So since that's not an option for me, I plug that number into the RoR formula to see my risk of having to drop down in limits. If I went by the rule of thumb of 300 BB's, I'd have a pretty decent chance of having to drop down, but since I form my idea of a suitable bankroll around what will allow me to virtually never step down in limits, I don't. And if by some chance I did go through a 600 BB downswing (my wost to date is half of that), I have other money that I'd be able to supplement my br with so that I wouldn't have to anyway.

But yeah, so that's my view on the subject of bankroll management. I always encourage everybody I know to keep a larger bankroll than most do for those reasons, unless it's in their best interest to take a shot at a higher limit, and then I tell them never before 300 BB's. I consider a 300 BB bankroll to be taking a shot.

GoT

[daryn]

i've been doing this my 2nd time around too. i have $23,000 still playing 5/10. talk about conservative!

[Scotty O]

I do the same thing. I will play 5/10 and maybe 10/20 at foxwoods and dont have a specific bankroll for this. However, when it comes to online, I play within my Bankroll. I made 1 deposit and hope never to do it again.

I use the 300 BB for limit games and 30 buyin rule for the PL and NL games. I use 30 because it is a personal choice.

Good luck
Scotty O

[alittle]

With a rubber band.

[kiddo]

I not really understand how you can trust Party Poker with $30K? Why not put 1/2 of it on a bank account? With only 3% interest it will give you $900/year, and its easy to put it back if you should need it.

[el_grande]

While I may agree that a 300BB bankroll is not necessary, I disagree with what you say about money managment there.

If you are playing $2/$4 with $100 with the intention of replenishing the money, $100 is not your BR. Some other number is. I believe it is advantageous to commit a BR to poker. Even if you are not doing it for a living, it keeps your other money protected.

I believe you can start playing $.5/$1 with $100 or even $50, but my questions at the start of the thread have to do with moving up or down when you have established a bankroll rather than just starting out.

[GuyOnTilt]

I not really understand how you can trust Party Poker with $30K?

I don't understand why I shouldn't trust Party and skins with $30k. Are they in danger of having to declare bankruptcy in the near future?

Why not put 1/2 of it on a bank account? With only 3% interest it will give you $900/year, and its easy to put it back if you should need it.

I earn 10% interest on my Empire account balance up to $10k, deposited directly into my account every month.

GoT

[Blarg]

I'm curious why they wouldn't give you interest on the other 20k. It's still money, you're still obviously a good customer, etc. Heck, it's just more liquidity for them to play around with.

[turnipmonster]

for what it's worth, I keep my online BR completely and totally separate from my live BR, and as a result there is a big gap between the games I play live and the games I play on the net. I like to have 500BB for whatever limit I'm playing, for mostly psychological reasons (i.e. I don't worry about it if I'm running bad). I rarely play PL/NL online but I would want at least 25 buyins.

--turnipmonster

[Jezebel]

Something to keep in mind is that the 300BB rule is under the assumption that you will never take money out of your role and that you add all of your winnings back into your role. If you pocket all of your winnings, (ie skim everything above 300BB into your pocket), your risk of ruin is exactly 100%. It may take a very long time to go broke but it is guarunteed to happen at some point in your career if this is the approach you take to managing your bankroll.

If you are unsure that what I am saying is true. Plug in the numbers into a RoR formula using your Standard Deviation and plug in zero for your winrate. When you skim off all of your winnings that is what your bankroll winrate becomes. Mathematically you will eventually go broke.

So if you want to be able to take money out of your roll and still have a viable chance at survival you need to pay yourself a fraction of your true winrate by the hour. For example if your estimated true winrate is $30 an hour, you could pay yourself $15 an hour and $15 goes back into the roll. Now when you plug the numbers into a RoR formula you would use the $15 as your winrate to determine how much of a roll you need to avoid going broke. This number will be much larger than 300BB. The bigger the percentage of money that goes back into the roll, the smaller overall bankroll you need.

Also note that using this method you can pay yourself by the hour regardless of your results. If you have a losing month you still pull out your fractional earn rate per hour knowing that you have not put yourself at greater risk of going broke.

In the end if you are going to live off of your bankroll you will need much closer to the bankroll requirements that GuyOnTilt is advocating than most believe.

[AJ_Rider]

I just wanted to acknowledge GuyOnTilt's point that's rarely brought up as far as bankroll considerations: not wanting to drop down. It took me a while to realize this, but now I always keep more than sufficient funds in my bankroll, as poker is my primary source of income. Before I started going by what turns out to be about a 750 BB rule, I would sometimes have months where I had to drop down in limits. For someone who doesn't rely on poker as their primary source of income, this isn't much of a problem. However, for me to meet my "monthly nut" I had to put in a substantial number of extra hours at the lower limit so that I didn't have to cripple my bankroll at the end of the month. The next month I decided to put in a ton of hours once I got back up to the limit I like to play at in order to build my bankroll into the extremely comfortable range. This has reduced a lot of stress on my time management as I am often looking about 3 months ahead now instead of just one month ahead, if that makes any sense. Basically, if I have a bad run, I don't necessarilly have to make it back up right away, but can rebuild over a longer period of time.

But yeah, at 2/4 your primary concern shouldn't really be bankroll in comparison to current limit, it should be building your bankroll so you can get the hell out of low limits and make some more valuable use of your time, even if it is just your hobby.

[Nilloc1204]

I've been lurking for a long time and decided it's time to post. Let me use one of my early posts to say that I think Andy B is the voice of reason around here. I often find myself saying "EXACTLY" when reading his posts.

Thanks, Andy B, for speaking your mind. I'm sure I'm not the only one who appreciates your contributions.

[ QUOTE ]
I think the notion of maintaining a 300 BB bankroll to play $2/4 is absurd. Clearly, you're not playing for a living, so going broke isn't the disaster that it would be if you were. A reasonable buy-in for $2/4 is $100. How hard is it going to be for you to come up with another $100 if you throw off your bankroll?

If I had needed 150 BB to play in a game, I would never have been able to play anything.

[/ QUOTE ]

[MMMMMM]

[ QUOTE ]
In theory, there should not be a problem with dropping half of your bankroll. That's why it's so big to begin with, to allow for brutal swings. The 300x factor haas been determined to be enough to handle the worst of possible swings.

[/ QUOTE ]


That is not the case at all.

Mason has posted on this very subject before, and if I recall, it was something along the lines that a 300BB bankroll might give a 95% chance of never going broke, but as a lifetime player, he expects to come up against that 5% quite a number of times. In other words, 300BB is not nearly enough to ensure never going broke even if you are an expert and you intend to play for life; a much larger bankroll would be required for that.

You might also look up some of Bruce Z's excellent posts on the topic by searching the archives. Just trying to alert you ahead of time to what could be a very nasty surprise at some future date if you were to fully base your plans on the above misapprehension.

[BeerMoney]

[ QUOTE ]
I not really understand how you can trust Party Poker with $30K?

I don't understand why I shouldn't trust Party and skins with $30k. Are they in danger of having to declare bankruptcy in the near future?

Why not put 1/2 of it on a bank account? With only 3% interest it will give you $900/year, and its easy to put it back if you should need it.

I earn 10% interest on my Empire account balance up to $10k, deposited directly into my account every month.

GoT

[/ QUOTE ]

GOT,

I think getting Empire to give you 10% is great. However, Stellarwind made a post about keeping money in your PartyPoker account.. He said something to the effect of: "You don't have to keep money in your partypoker account for it to be part of your bankroll.." In other words, keep your money somewhere else,,, it can still be allotted to playin poker, it just doesn't have to be specifically in your PP account. He reasoned that PP was not an FDIC type of bank, and is somewhat sketchy. He communicated it better than I am right now, but I think his words were wise.

[GuyOnTilt]

You don't have to keep money in your partypoker account for it to be part of your bankroll.." In other words, keep your money somewhere else

I play on two sites, so it's split between them. And I don't want to have less than $10k in any one just for logistical purposes. I've been "in" over $8k on one site during a day before, and I was still up. If I'd been down on a day like that, who knows how much I would've needed on that particular account. One reload per each 4 tables is $6k right there and that's a pretty common occurrance seeing as though I reload is I get down to $400-$500 at a table. And since I'm keeping upwards of $10k in each account, what's another $5k? I'll have to put it there anyway if I have a couple down days. I just don't think having several thousand in Party really isn't as big of a deal as people make it out to be. And even if I did, I'd still be keeping $20k in there regardless just out of necessity.

GoT

[Kevin J]

If you have a decent edge and SD, I believe the risk of going broke with 300 BB's is closer to 98%. Still, even 95% is a very comfortable number. But here's what most people don't take into consideration...

This assumes you do not TOUCH your bankroll!! So when you win 200 big bets, your br is now at 500. You go on a 120 bb losing streak, then win 150, your br is at 530, and so on. To the point where your chances of sliding your entire (updated) bankroll is almost nil.

What this all means is that if you manage your bankroll properly, you're chances of going bust is not enought to worry about. But most people take profits out too soon and run the very real risk of going bust sooner or later. IMO-

[timmer]

see embedded replies in <font color="blue"> BLUE </font>


[ QUOTE ]
OK, I'm familiar with the 300BB bankroll idea. I use it. Well, maybe I use more like 200BB, but I play on party. :-)
Mathematically, 300BB is supposed to keep you afloat as long as you are playing fairly well.

[/ QUOTE ]

<font color="blue"> That number is a rule of thumb that isnt likely to be definitive. Actually this number is a product of your standard deviation and your win rate. [1] </font>


[ QUOTE ]
Let's say you move up a level. I just did this. I started with $100 at party playing $.5/$1 and ran it up to $500, where I switched to $1/$2. Now I just started playing $2/$4 and my BR is 300BB for that.

I would not have started playing $2/$4 with 150BB, so what happens if I go on a horrible streak and drop to 150BB? I'd be in a situation where I'm playing a game too rich for my BR. So if you were in this situation, would you drop down a level? How low do you have to get to do this?

[/ QUOTE ]

<font color="blue"> That is a question only you can answer. It should depend on: your tolerance to risk, your ability to start again with a new bankroll, How low you are willing to play. As well as many other factors.

Remember the lower your bankroll gets the longer it will take for you to build it back up at a lower limit. Also the greater the chances you will go broke if your not willing to play at the lowest limits applicable.

Another factor is how likely it is that you are simply not playing well. This is a major factor and is the root cause in many cases of severe downdraw.

If you are willing to stop playing for awhile, do some serious studing on your game and assess your mental aspect, then make adjustments where needed, you may be able to remain at the limits you are currently playing. </font>


[ QUOTE ]
Is there a modification to the simple 300BB rule where you regress to previous levels when you hit a certain BR? Should there be?

[/ QUOTE ]

<font color="blue"> YES !! and what that number would be is up strictly to you. However I would suggest around 200 Big Bets if you cant or are not willing to refill your bank by outside means

just my few cents

timmer </font>

[1] Poker Essays pg. 59-Mason Malmuth, Two Plus Two Publishing