General Poker Strategy Articles
Bankrolling Your Poker Game
By Lou Krieger
Money and bankroll, not the same thing at all. There are enough misconceptions about money and poker bankroll requirements to fill a fair-sized book, and enough players with questions about betting limits, bankroll size, and related issues to fill the World Series of Poker tournament room at the Rio.
Dispelling old money-management bromides
First, let’s dispel that old quit-while-you’re ahead and quit-once-you’ve-lost-a-certain-amount nonsense. If you really believe it makes sense to quit while you’re ahead, or whenever you’ve lost a given amount of money, you’ll find yourself playing only when your results are banded between your stop-loss and stop-win limits. Although quitting when you’re ahead allows you to profit from the game, that strategy only makes sense if you decide to quit poker entirely. If that’s the case, and you’re ahead in today’s game, quitting puts that money into your pocket and you’ll never lose it back. But if you quit a winner today and lose tomorrow, you’re no worse off than if you simply played on and lost the money you won earlier in the session. All you did was pocket those winnings for a few hours. The same analogy holds for setting stop-loss limits too If you plan on playing again and believe you can win, it makes no difference whether you quit now or keep playing.
When you’re thinking about whether to quit or keep playing, here are four things to consider: If the game is good and you’re a favorite, keep playing. If the game is bad and you are an underdog, quit - even when you’re winning. If a big win or a big loss makes you psychologically unable to play your best poker, quit the game - but bear in mind that you’re leaving because you are no longer in the best poker-playing frame of mind; you’re not quitting because you won or lost some arbitrary sum of money. If you’re not playing up to the best of your ability, go home. The game will still be there tomorrow. Gambling successfully is based on putting yourself in situations where you have a positive expectation. Winning poker players find games where they are favored over their opponents. While favorites do lose some of the time, they show a profit in the long run.
What should you do about your bankroll?
Many players confuse money management with bankroll management. They are two different things entirely. Money management is all that unmitigated claptrap about setting stop-loss and stop-win limits. It’s quite meaningless. But what you do about your bankroll and how you manage it is an entirely different matter. There’s a generally accepted theory that a bankroll of 300 big bets is required to offset the inherent variation in poker games. That may or may not be true for you. Like so much about poker, it depends.
Bankroll issues for new professional poker players
If you are a brand new professional player who’s diligently saved a playing stake and is about to move to Las Vegas, Los Angeles, Atlantic City, Foxwoods, or any other poker mecca, you’ll be better off with a playing stake that’s more than 300 big bets. Think of 300 big bets as a
minimum playing stake, and right now you can’t be sure how much you’ll need. While you may turn out to be a world-class player who can get by on a smaller bankroll, it’s also true that you might be only a marginally successful, high-variance player who needs more than the minimum to keep the wolf from your door. To be on the safe side, 400-600 big bets gives you a much better chance to survive and grow as a player. In addition to your playing stake, you should have about 18-24 months of living expenses set aside to give you the very best opportunity to succeed in your new profession. If you’re not a winning player, no bankroll is likely to suffice, and by the time you run through your playing stake or the money you set aside for living expenses - whichever comes first - you’ll be faced with the hard choice of using one of your two remaining bankrolls to subsidize the other. When that happens, you’ll find yourself clinging to your dream by a thread and slipping.
Issues for experienced pros
If you’re an experienced pro who has been earning his or her living for a year or longer, you’ve established an annual hourly win rate and that can be used as a guide for managing your bankroll. Suppose you’re playing $30/$60 holdem for a living and find that you are able to beat the game for one big bet per hour. If you’re playing 1,500 hours per year, you can figure on making approximately $90,000 every year. If you want to maintain a bankroll of 500 big bets, you’ll need $30,000. Since you’re earning $90,000 you can pay yourself a salary and take it directly from your winnings. You might also want to build your bankroll and promote yourself to the $60/$120 game, or you might want to take a protracted shot at $100/$200. Just calculate the bankroll you’ll need at those limits and see how you do. An alternative strategy, and probably a better, less risky one, is simply to take shots at the bigger game from time to time to gauge your ability and confidence in what’s probably a tougher game at a riskier limit.
There are far fewer issues for semi-pros
If you are a winning poker player, but have a real job too, many of these issues fall by the wayside. Your salary pays for living costs, and if you hit a protracted losing streak, you can infuse your poker bankroll with discretionary earned income. Playing poker is always easier if you have additional sources of income, which is why so many successful poker players invest their money in business ventures outside of poker. This diversification is a safety net of sorts. It’s also the reason many people become full-time poker professionals only after they retire from their day jobs. Once they have income from a retirement plan, many of the issues related to maintaining a bankroll for playing poker and another bankroll for meeting living expenses become redundant.
No issues at all for most poker players
If you play poker because you love the game, and play as a hobby, as most players do, you really have no issues related to bankroll management. Low limit players - actually all players who play at a limit that can be underwritten by discretionary income - don’t really need to worry about squirreling away stashes of money for playing and living. If they lose their entire playing stake, they can use part of their next paycheck to play again. Most of us fall into this category, and when we do, poker is like any other hobby. Hobbies cost money, and the source of that money is usually earned income that’s diverted to underwrite these enjoyable, leisure-time activities. If you collect old movie posters, build model railroads, or restore old cars, you’re not any different from the poker hobbyist who loves the game, plays for stakes he can afford, and enjoys himself whether he wins or loses.
There’s not much mystery to money and bankroll issues. Some of us will have them; others won’t. Here’s what you really need to know. Money management is a meaningless strategy for maximizing winnings or limiting losses. Stop-loss limits, or quitting once you’ve won a predetermined amount of money, will neither stop your losses if you are a losing player nor protect your profits if you are a winner. Good players will establish an expected hourly win rate regardless of whether they quit after they’ve pocketed a certain amount of winnings or keep playing. But the more hours they play, the more they figure to win. Poor players will probably lose their money no matter what they do. If you’re playing in a good game, and you are playing your best, stay in the game unless you have other obligations. If you’re in a bad game, get out of it now. Never mind if you’re winning or not. If you’re not at your physical or psychological best, don’t play. If you do, your condition will probably take itself out on your bankroll. If you’re an aspiring professional player, you’ll need at least a 300-big-bet stake to play on, and another stake to cover living expenses. If you’re an experienced, winning player, you’ll be able to use some of your winnings to pay for your living expenses.
By Lou Krieger
Money and bankroll, not the same thing at all. There are enough misconceptions about money and poker bankroll requirements to fill a fair-sized book, and enough players with questions about betting limits, bankroll size, and related issues to fill the World Series of Poker tournament room at the Rio.
Dispelling old money-management bromides
First, let’s dispel that old quit-while-you’re ahead and quit-once-you’ve-lost-a-certain-amount nonsense. If you really believe it makes sense to quit while you’re ahead, or whenever you’ve lost a given amount of money, you’ll find yourself playing only when your results are banded between your stop-loss and stop-win limits. Although quitting when you’re ahead allows you to profit from the game, that strategy only makes sense if you decide to quit poker entirely. If that’s the case, and you’re ahead in today’s game, quitting puts that money into your pocket and you’ll never lose it back. But if you quit a winner today and lose tomorrow, you’re no worse off than if you simply played on and lost the money you won earlier in the session. All you did was pocket those winnings for a few hours. The same analogy holds for setting stop-loss limits too If you plan on playing again and believe you can win, it makes no difference whether you quit now or keep playing.
When you’re thinking about whether to quit or keep playing, here are four things to consider: If the game is good and you’re a favorite, keep playing. If the game is bad and you are an underdog, quit - even when you’re winning. If a big win or a big loss makes you psychologically unable to play your best poker, quit the game - but bear in mind that you’re leaving because you are no longer in the best poker-playing frame of mind; you’re not quitting because you won or lost some arbitrary sum of money. If you’re not playing up to the best of your ability, go home. The game will still be there tomorrow. Gambling successfully is based on putting yourself in situations where you have a positive expectation. Winning poker players find games where they are favored over their opponents. While favorites do lose some of the time, they show a profit in the long run.
What should you do about your bankroll?
Many players confuse money management with bankroll management. They are two different things entirely. Money management is all that unmitigated claptrap about setting stop-loss and stop-win limits. It’s quite meaningless. But what you do about your bankroll and how you manage it is an entirely different matter. There’s a generally accepted theory that a bankroll of 300 big bets is required to offset the inherent variation in poker games. That may or may not be true for you. Like so much about poker, it depends.
Bankroll issues for new professional poker players
If you are a brand new professional player who’s diligently saved a playing stake and is about to move to Las Vegas, Los Angeles, Atlantic City, Foxwoods, or any other poker mecca, you’ll be better off with a playing stake that’s more than 300 big bets. Think of 300 big bets as a
minimum playing stake, and right now you can’t be sure how much you’ll need. While you may turn out to be a world-class player who can get by on a smaller bankroll, it’s also true that you might be only a marginally successful, high-variance player who needs more than the minimum to keep the wolf from your door. To be on the safe side, 400-600 big bets gives you a much better chance to survive and grow as a player. In addition to your playing stake, you should have about 18-24 months of living expenses set aside to give you the very best opportunity to succeed in your new profession. If you’re not a winning player, no bankroll is likely to suffice, and by the time you run through your playing stake or the money you set aside for living expenses - whichever comes first - you’ll be faced with the hard choice of using one of your two remaining bankrolls to subsidize the other. When that happens, you’ll find yourself clinging to your dream by a thread and slipping. Issues for experienced pros
If you’re an experienced pro who has been earning his or her living for a year or longer, you’ve established an annual hourly win rate and that can be used as a guide for managing your bankroll. Suppose you’re playing $30/$60 holdem for a living and find that you are able to beat the game for one big bet per hour. If you’re playing 1,500 hours per year, you can figure on making approximately $90,000 every year. If you want to maintain a bankroll of 500 big bets, you’ll need $30,000. Since you’re earning $90,000 you can pay yourself a salary and take it directly from your winnings. You might also want to build your bankroll and promote yourself to the $60/$120 game, or you might want to take a protracted shot at $100/$200. Just calculate the bankroll you’ll need at those limits and see how you do. An alternative strategy, and probably a better, less risky one, is simply to take shots at the bigger game from time to time to gauge your ability and confidence in what’s probably a tougher game at a riskier limit.
There are far fewer issues for semi-pros
If you are a winning poker player, but have a real job too, many of these issues fall by the wayside. Your salary pays for living costs, and if you hit a protracted losing streak, you can infuse your poker bankroll with discretionary earned income. Playing poker is always easier if you have additional sources of income, which is why so many successful poker players invest their money in business ventures outside of poker. This diversification is a safety net of sorts. It’s also the reason many people become full-time poker professionals only after they retire from their day jobs. Once they have income from a retirement plan, many of the issues related to maintaining a bankroll for playing poker and another bankroll for meeting living expenses become redundant.
No issues at all for most poker players
If you play poker because you love the game, and play as a hobby, as most players do, you really have no issues related to bankroll management. Low limit players - actually all players who play at a limit that can be underwritten by discretionary income - don’t really need to worry about squirreling away stashes of money for playing and living. If they lose their entire playing stake, they can use part of their next paycheck to play again. Most of us fall into this category, and when we do, poker is like any other hobby. Hobbies cost money, and the source of that money is usually earned income that’s diverted to underwrite these enjoyable, leisure-time activities. If you collect old movie posters, build model railroads, or restore old cars, you’re not any different from the poker hobbyist who loves the game, plays for stakes he can afford, and enjoys himself whether he wins or loses.
There’s not much mystery to money and bankroll issues. Some of us will have them; others won’t. Here’s what you really need to know. Money management is a meaningless strategy for maximizing winnings or limiting losses. Stop-loss limits, or quitting once you’ve won a predetermined amount of money, will neither stop your losses if you are a losing player nor protect your profits if you are a winner. Good players will establish an expected hourly win rate regardless of whether they quit after they’ve pocketed a certain amount of winnings or keep playing. But the more hours they play, the more they figure to win. Poor players will probably lose their money no matter what they do. If you’re playing in a good game, and you are playing your best, stay in the game unless you have other obligations. If you’re in a bad game, get out of it now. Never mind if you’re winning or not. If you’re not at your physical or psychological best, don’t play. If you do, your condition will probably take itself out on your bankroll. If you’re an aspiring professional player, you’ll need at least a 300-big-bet stake to play on, and another stake to cover living expenses. If you’re an experienced, winning player, you’ll be able to use some of your winnings to pay for your living expenses.
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