Poker bankroll basics

Bankroll management can seem like a dry subject, or perhaps one that’s easily dismissed, but it’s an important part of the formula that can deliver you poker riches. Let’s look at what we mean by bankroll management and why it’s important.

In poker there is a luck factor – or mathematical variance if you prefer – which affects results. This is immutably true, no matter how good you are at the game. For example, even the best player in the world has a 20% chance of going broke when he gets his money in the middle with A-A vs J-J.  If you have all of your poker bankroll on the line when this happens you’re playing Russian roulette with your money and are likely to go broke.

Using bankroll management you divide your ‘money for poker’ into smaller chunks to mitigate the risk of going broke – in simple language this means that you may get ‘unlucky’ when betting one of these chunks but it won’t have a material effect on your overall bankroll. The only downside of this approach is that you have to play more hands to realise your ‘edge’ in any game. It’s important to understand that your edge doesn’t change – you are just preventing the catastrophe of going broke to make sure your edge ‘plays out’ and is realised.

Managing your war chest

So how do you practice bankroll management? Well, the greater the luck factor in any game, the greater the number of chunks you should split your roll into. A good standard rule of thumb for no-limit hold’ em cash games is 20 buy-ins. So to play $0.50/$1 you should have at least $2,000 in your bankroll. However, as you go up the limits the games are more aggressive, you’ll be all-in more and so the luck factor (variance) is greater and you may want closer to 40 buy-ins.

As a recreational player you may not believe this thinking applies to you as if you go broke you’ll just reload from external monies. That’s fine, but you should understand that your risk of going broke is great and you may never know if you’re really better or worse than the game you’re playing in. A far more satisfying way to play is to have a separate bankroll for poker and see it build. You can take any approach to your poker money you like, of course, but recognise that the mathematical rules and the chances of going bust won’t change.

Read Part 2...