Some general thoughts on bankroll management...

[ggbman]

There are many people who read these forums and aspire to be like one of their favorite posters. Most of the time, these posters are successful mid-high limit players. It is an excellent thing to have something to aspire to in all walks of life, not just poker. However, one thing that I have noticed is that people love to try to move up in stake levels before their bankroll or their psychological well being can afford to do so. This can probably be attributed to the fact that people love the “thrill” of gambling and because people generally aspire to do better for themselves.


One of the most common misconceptions about poker in my view is how much luck is in the game. You see, some people underestimate how much variance there is this game. They do well for a short period of time and scoff when people when mention break even streaks of 25K+ hands. And yet there are others who understand how big the luck factor is in poker, but don’t see that over the course of a full year, most of the time poker players have more control of their earnings than people working regular 9-5 jobs. This of course isn’t always true, but what I’m trying to say is in the long run you will earn what you deserve.


This leads me to what the main topic of this little essay really is; Bankroll Management. A lot of the time on the fast path to success, people spend too much time focusing on what other players have done to be successful and not enough on what they can do to be successful. Some people move up to the next stake level as soon as they have the “required” 300 Big Bet bankroll. Just because some people immediately have success when they move up a stake level doesn’t mean that they are a long term winner in that game. Likewise, someone might move up and endure a horrid downswing when in reality; they could beat the game healthily given an average run of cards.


What this all means to me is that people have a better chance of realizing their maximum level of success if they are more conservative with their bankroll. Experienced players should have a good idea if they can be successful in a game regardless of their immediate results, but not having an adequate bankroll might seriously hinder ones ability to make proper decisions in these instances. Some people will think about how long it would take them to recoup their losses at the limit they are used to playing and be bothered by it, so they incorrectly stick it out at a higher limit. Other times, people will quickly be intimidated by the amount of money that they lost in a short period of time and move back down when they have a good chance to be a winner in the higher games.


In my opinion, the solution to these problems is to be more conservative when it comes to bankroll management. I don’t think the “300BB” rule which is commonly accepted is anywhere near what most players should have for their current limit, let alone when moving up into uncharted territory. The first thing about the 300BB bankroll is that if you have any sort of downswing, you no linger have a sufficient bankroll. Given how mathematically easy it is to have a 100BB downswing, it doesn’t make sense that you could have one of those and no longer have the proper bankroll for your stake level. Personally, I like 600BB to be the low end of my bankroll, and I consider it to be healthy above 900BB. Of course, there’s also no shame in having thousands of big bets for your stake level if you are happy with the competition and your earn rate [img]/images/graemlins/smile.gif[/img]

Also, many solid players experience extended bad streaks and also have their play deteriorate as a result. The best example that comes to mind of this was David Ross, who was a solid proven player at the party 15-30 games with a healthy win rate who went on a 610BB slide. This is an extreme case, but the point is you should be able to go through a natural downswing and still have the roll to play a stake level should you so desire.


The main reason I find many of these bankroll management mistakes silly is because it wouldn’t take a lot of the players who make these errors very long to amass an appropriate bankroll for the stakes they wish to play. Someone who mutitables any limit can usually pull in 5-10 Big bet per hour, sometimes even more. This means that with an extra month or two of grinding it out would usually be enough to make them the extra money they would need to have a comfy role, and IMO this is more than worth it.


Now I should say that poker players better than myself have successfully used more aggressive styles when it comes to bankroll management, some of whom are legends around here. I don’t present this information as fact, it’s opinion based from someone who has had some good success playing poker and working my way up in limits. I find my conservative strategy best for both my poker career and my psyche. Obviously anyone can feel free to implement any of this as they see fit, but this is something that gets danced around a lot and I thought I would express my opinion on the matter.

Good luck at the tables, just not against me!!!

Gabe

[smb394]

Very good post. I don't go quite as high with the BR requirements (usu. 500BBs), but still great points nonetheless.

[CaptSensible]

Thanks for an informative and thoughtful post.
I came to 2+2 about 4 months ago. I was playing the party 22's and 33's. I was also down about 1400 bucks. I posted some HH's and was given some great advice. One of which was to move down to the 11's. I did this without hesitation. The idea of getting out of a 1400 buck hole at the 11's was a littel underwhelming but I was determined to improve my game and dig myself. I put my faith completely in the advice I got here. I reloaded 500 into my party account ready to take on the 11's!! 4 months later I'm 170.00 away from seeing daylight [img]/images/graemlins/smile.gif[/img] I should note that some of that was won with live,live tourney play and a few 22's.

Two days ago I moved up to the 22's. Been doing well at 'em BUT i'm completely prepared to move back down to the 11's if need be. I personally don't think my bank roll is quite strong enough for the 22's yet (I'd like to have about a grand) but at 750.00 I'm willing to test the waters and see how it goes. I'll keep your post in mind as I get my feet wet [img]/images/graemlins/grin.gif[/img]

Thanks again!

[stigmata]

I have to agree, but with one addition:

I think an aggressive bankroll strategy is fine at micro/small stakes. Losing a few hundred dollars really isn't a disaster for most people around here. Once you reach the small stakes, you will be able to move up faster if you are prepared to drop back down if things go wrong.

However, once you get to a reasonable limit with a good earn rate, I really think a conservative bankroll strategy is the only way. Once you reach mid/high stakes, 300BB is just plain wrong. There is the equation for bankroll somewhere in one of the poker essays books, and for 10/20 6-max this came out at something like 5-600BB, IIRC.

[A_Junglen]

I agree with pretty much everything you said. I think bankroll management is extremely underrated.

[ggbman]

[ QUOTE ]
I have to agree, but with one addition:

I think an aggressive bankroll strategy is fine at micro/small stakes. Losing a few hundred dollars really isn't a disaster for most people around here. Once you reach the small stakes, you will be able to move up faster if you are prepared to drop back down if things go wrong.

However, once you get to a reasonable limit with a good earn rate, I really think a conservative bankroll strategy is the only way. Once you reach mid/high stakes, 300BB is just plain wrong. There is the equation for bankroll somewhere in one of the poker essays books, and for 10/20 6-max this came out at something like 5-600BB, IIRC.

[/ QUOTE ]

Yes i agree with this addition, especially because the difference between %.5-$1 and $3-%$6 is there, but it's not huge. This doesn't become true as you go from $5-10 to $10-20 6 max etc... But i do think it's fine to be a little more aggressive at the lower stakes.

Gabe

[FlFishOn]

Keeping a big roll online is, IMHO, folly. No
online poker provider is even close to bank
safe. We're talking orders of magnitude more
risky.

Feel free to keep 300 BBs on deposit to play 15-30
but you will be grinding for quite some time (after you stop crying) to make it back if it goes away.

[gildwulf]

[ QUOTE ]
Keeping a big roll online is, IMHO, folly. No
online poker provider is even close to bank
safe. We're talking orders of magnitude more
risky.

Feel free to keep 300 BBs on deposit to play 15-30
but you will be grinding for quite some time (after you stop crying) to make it back if it goes away.

[/ QUOTE ]

I'm guessing the conservative bankroll strategy includes money in Neteller, online accounts, etc. As far as I'm concerned, if you can reload from Neteller instantaneously, it's part of your BR.

[stigmata]

When we talk about bankroll, it can be anywhere. I also think partypoker is pretty damn solvent.

[BigF]

[ QUOTE ]
[ QUOTE ]
Keeping a big roll online is, IMHO, folly. No
online poker provider is even close to bank
safe. We're talking orders of magnitude more
risky.

Feel free to keep 300 BBs on deposit to play 15-30
but you will be grinding for quite some time (after you stop crying) to make it back if it goes away.

[/ QUOTE ]

I'm guessing the conservative bankroll strategy includes money in Neteller, online accounts, etc. As far as I'm concerned, if you can reload from Neteller instantaneously, it's part of your BR.

[/ QUOTE ]

How many times do I have to say this. Neteller is NOT bank safe. Keep most of your bankroll on reputable poker sites and in your bank account. Keep as little money as you can in Neteller.