Bankroll management is maybe the least talked about aspects of the game but is just as important as any thing else you have control over. Many players who consistently win at poker find themselves broke from time to time because they can't manage their bankroll properly.
A bankroll is that amount of money that finances your poker activities. You bankroll does not include money you need for rent, food or anything else. It is a very good idea to keep your bankroll separate from the rest of your money. It will make it much easier to track your winnings and losses. If you lose your bankroll, well that sucks, but you can not play poker with money you need for rent, food or anything else. This is not a suggestion, this is the way it has to be, okay? If you can't deal with that then you have gambling problem my friend. If you have a $1,000 bankroll, take $50 to the poker table and lose it, that means your bankroll is now $950. If instead of losing, you won $250 dollars, then it is up to you if you want to increase your bankroll to $1,250 or take your profit and go out for a nice dinner.
So why do so many really good poker players blow their bankrolls? Bad bankroll management is almost always to blame. People who have learned to be smart and disciplined while sitting at the table are often undisciplined about the amount of money they take to the table. A bit of bad luck, or just one or two bad moves and all the chips are gone. Now they may start playing angry, mad that some idiot hit a two-outer on the river to beat them, or they play at a higher level to quickly win back what they lost. When this happens a bankroll that has been carefully built over weeks or even months can disappear in an hour. It happens all the time.
How can you keep it from happening to you?
Let's forget all about poker for a second. Let's imagine a new card game called "Tyler Draw". The rules of Tyler Draw are very simple: There are two players, me (Tyler) and whoever I'm playing against. No cards are dealt to either player - instead the dealer turns over just one card. If the card is a 2, 3, 4, 5, 6 or 7 my opponent wins. If the card is an 8, 9, 10, jack, queen, king, or Ace I win. Nice game huh? Wanna play?
In Tyler draw, I will win 53.85% percent of the time, because 7 out of 13 cards make me a winner, and only 6 out of 13 cards make me a loser.
So let's say I have a $100 bankroll. One guy wants to play Tyler Draw against me for $1 a hand and another guy wants to play Tyler Draw against me for $100 dollars a hand. Who should I play? Well I only have $100, so if I play for $100 a hand there is a 46.15% chance I will lose my whole bankroll on one hand. The odds are only slightly in my favour, so why take an unnecessary risk? There is virtually no risk of me losing my entire $100 bankroll if I only wager $1 per hand. In fact the risk is so small, I really should take that "virtually" out. The more hands of Tyler Draw I play, the greater the certainty that I will make money.
Does this principle make sense? Now I know what you are thinking; What kind of sucker would be the "other guy" at a game of Tyler Draw? Well, walk into a casino. Are you in a casino now? Great. Okay, look around. See all those people playing the slot machines? See the sign saying Our Loose Slots Pay back 92%? Well, that's about the same odds they would get playing Tyler Draw.
But today's lesson isn't about the bad decisions other people make - it's about teaching you not to make bad bankroll management decisions. So let's apply what we've learned so far to the game of poker. Let's pretend you are one of the best poker players in the world. You have a bankroll of $100,000. Do you:
A: Take $50,000 to a $250/$500 No-Limit hold 'em table.
B: Take $5,000 to a $25/$50 No-Limit hold 'em table.
Knowing you will probably make money because you are so good, you may choose option A in order to maximize your profit. But as good as you are, you might get unlucky and lose half you bankroll. Better to take a seat at the smaller limit table. If you are really good you will probably win, an if you get unlucky only 5% of your bankroll is exposed.
What is the maximum amount you should ever bring to a table? The very disciplined professionals say 5% but some will say as much as 10%.
Set a limit on how much you bring to a table.
Bankroll management is not easy, but it is vital. So vital that I'm going to write about it in my next post too!
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