The need for Bankroll Management
There’s some discussion on some of the forums lately about the need or ability to use effectively, bankroll management.
What is Bankroll Management? Well, in poker lingo, its the total amount of capital a player that allows him to play, without having to reinvest any more of their own money. In a nutshell, its being able to use your bankroll in the most effective, and hopefully profitable, way. Its also a useful tool to tell you when you’re ready to move up in limits, along with improving your skills and learning new techniques.
Anyone can load cash into an online poker site and start playing whatever limit they desire, be it 1c/2c or $1/$2 or higher. If you were to drop $1000 online to play, you could play at the NL1000 level (or $50/$100 blinds) as a short stack, and play. But is that the best way to use your bankroll effectively? Absolutely not, its actually a recipe for disaster. One suckout, one bad call, and you’re broke and have to reload your account again.
I use this guideline for playing online. For cash games, I don’t enter any level that I don’t have a bankroll that equals 20 to 25 buyins for that level. So if my bankroll is $1000, the highest level I would consider playing would be NL50, where the maximum amount I can buyin on a table is $50 with $.25/$.50 blinds. This would give me in total 20 buyins. So why so low?
This game is filled with variance. Variance is the four letter word of poker. It means that even if you were to play your absolute BEST poker, mistake free, you could still lose. A long period of downward variance is called a downswing, and can last a very long time, from weeks to months, and in the case of some pros even, years. Bankroll Management is the only tool a player can use to allow them still play effectively with variance having minimal impact on their overall performance. With 20 to 25 buyins, this should be enough of an insurance to weather through the variance storms that are surely lurking on the horizon. If your bankroll were to suffer horribly and fall below 20 buyins, then you would have to move down in the limits your play (from $.25/$.50 games to $.10/$.25 games) until you can rebuild your bankroll back up the the 20-25 bi level again before you can return to playing the level you were on.
NO ONE likes to admit failure, and moving down in limits can seem like admitting defeat, but truth be told, its far from it. Variance can be cruel, and just because you have a bad run doesn’t mean you can’t play the game, it just means that reality is biting you back. Moving down in limits is not an attack on one’s playing ability. I look at it more like an oppurtunity to rebuild, relearn, and regroup. I know I can crush the lower limit game, and it wouldn’t take very long to rebuild my bankroll, and the best part is I can take new techniques I’ve learned to those lower limits and try to employ them with a much lower risk if case they fail. Think of it as more a training ground to test new things, like blind stealing or 3 betting. If you’ve never done it, its better to test them at a lower level that would have a minimum impact on your bankroll, yet give you plenty of oppurtunity to field test and help grow your roll again.
Bankroll Management is a way of earning your stripes in online poker. Anyone can deposit any amount of their own money onto any poker site and start playing with the big boys at any level, but if you haven’t learned how to play at that level of game, you’re quickly marked as a fish and you’ll soon be wondering where your money went. I don’t mean to say that you shouldn’t deposit as much as you can afford, but be sure that you start at a level you can consistently win at before you venture into the world of the sharks online at the higher limits.
If you can afford to reload your poker account over and over and over again, by all means, don’t let me stop you. Its your money after all…that is, until you sit at a table you’re not rolled or skilled for and lose it. It’ll happen.
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