Poker Bankroll Management

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The following principle is key to becoming a successful poker player. Without the proper money management skills, the best players in the world would go broke. For all you skim-readers, here are the basic rules of bankroll management for Texas Hold’em.

Bankroll management is where you play at certain limits to avoid losing all of your bankroll due to bad runs of cards, which any poker player must expect from time to time. This is called ‘playing within your bankroll’. Subsequently, if you play at higher limits where there is too great a chance of losing all of your poker money, you are ‘playing out of your bankroll’.

The reason why you should choose your limits carefully in poker is due to the variance. Variance is a term used to describe the ‘ups and downs’ of poker where you fluctuate from having bad runs of cards to good runs of cards, resulting in varying profits and losses. If you play poker for long enough there are going to be periods of time where you will consistently lose money, not because you are playing badly, but because the cards are not falling your way. This means that if you do not have enough money in your bankroll to absorb these downswings, it is likely that you will lose it all.

What’s your poker bankroll?
Your poker bankroll is the total amount of money you’ve set aside for playing poker. If doesn’t matter if you have $500 spread across 3 poker rooms or $500 in one room, you always have to look at it as a whole. The bankroll must be managed on a daily basis as it will help you find out at what stakes you can play without risking to lose too much money.

Basic rules of bankroll management
For No Limit or Pot Limit cash games, your bankroll should be 20 times the full buy-in of the table you want to sit at. So if you want to have the best opportunity of making money at a 25c/50c table where the maximum buy-in is $50, you should have a bankroll of minimum $1000. You can also apply bankroll management by only putting 5% of your bankroll on the table at any given time, which matches the 20 times full buy-in rule.

For tournament games, the best method for bankroll management is 40 buy-ins for the table you wish to play at. So if you want to play at a $5+$0.5 Sit&Go, you should have a bankroll of $220.

NL Holdem		Limit Holdem		Sit&Go’s
Blinds	Bankroll	Blinds	Bankroll	Stakes	Bankroll
5c/10c	$200	5c/10c	$30	$1+$0.1	$44
10c/20c	$400	10c/20c	$60	$2+$0.2	$88
25c/50c	$1,000	25c/50c	$150	$5+$0.5	$220
$0.5/$1	$2,000	$0.5/$1	$300	$10+$1	$440
$1/$2	$4,000	$1/$2	$600	$20+$2	$880
$2/$4	$8,000	$2/$4	$1,200	$30+$3	$1,320
$5/$10	$20,000	$5/$10	$3,000	$50+$5	$2,200
$10$/20	$40,000	$10$/20	$6,000	$100+$10	$4,400
$25/$50	$100,000	$25/$50	$15,000	$200+$20	$8,800
$50/$100	$200,000	$50/$100	$30,000	$500+$50	$22,000

Conservative vs. agressive bankroll management
The basic rules above should give you the best chances of making money playing poker, but depending on your style of play, there are two other bankroll management methods that can work effectively.

The conservative bankroll method - 40 cash games and 80 tournament buy-ins
This is for long-term players who want to avoid variance and intend to make a living playing poker. A deep bankroll will help you withstand downswings.

The Aggressive bankroll - 10 cash games and 20 tournament buy-ins
If you want to move up quick and see instant results, the aggressive poker bankroll method is for you. However, you have to understand you’ll run into variance and you should be ready to drop down in stakes when you lose a few buy-ins because losses will have more impact on your bankroll.

Dropping down and moving up in stakes
As I said earlier, variance will always come into play in poker and there will be days where you’ll have good runs of cards and bad runs of cards. So your bankroll will alternatively be too small or too big for the stakes you’re playing at. Keep in mind that if your bankroll drops below the 20 buy-ins limit, you should also drop down a level to continue playing within your bankroll. Then, when your bankroll gets larger, you can switch back to the next level. Also, if your bankroll allows you to comfortably play at the next limit up, then you can move up to that limit.

Sometimes you might be tempted to move up a level just to test your skills and to see if you can beat a more competitive game. Taking a shot is doable as long as you continue to manage your bankroll wisely and you don’t get carried away by the big wins you get at higher levels. When taking a shot at the next level up, you should not buy in for the maximum amount so you won’t be putting too much of your bankroll into the game. Stick with the 5% rule and you should not run the risk of going broke.