Bankroll Management

There are many good poker players out there who seem to have no problem getting results in tournaments and cash games yet they are perpetually broke. Why is this? For many players it all boils down to the old chestnut that is bankroll management. What exactly does this phrase mean?

Chris “Jesus” Ferguson just recently completed one of his famous bankroll challenges which consisted of him turning $0.00 into $10,000. He started off by playing freerolls and then gradually worked his way up through the limits. Here are his rules for managing a bankroll:

1. Never buy into a cash game or SnG with more than 5% of your bankroll. You always have to factor in the fact that you can get ironed out in any game and so you need to have a decent risk of ruin. By this I mean that you have to take into account that standard deviation could destroy your bankroll so therefore your bankroll has to simulate the long run as close as possible; after all in an ideal world you will only be making positive expectation plays.

2. Never buy into a MTT with more than 2% of your bankroll. We all know that the luck factor is even higher in a multi-table tournament than a cash game so this is very good advice. It’s possible for the best tournament players to go a long time without even a cash to their name. Of course you must try and play for the win as opposed to creeping into the money. The top three spots of any tournament usually pay so well that they make up for the many times you have busted out before.

3. If at any time in a no-limit or pot-limit game the money on the table represents more than 10% of your bankroll, leave the game when the blinds come to you. I presume he is referring to the money you have sitting in front of you, not the collective money of all the players at the table. I believe if you think are playing well and have the edge over at least a couple of other players in a cash game, and that the game is good, then you should stay, especially if you are winning. Even David Sklansky, who many would consider the ultimate nit, suggests propping your eyes open with matchsticks if you are in a great cash game.

All in all this seems like a pretty good guideline to me. However it takes discipline to follow this which unfortunately many poker players lack. This leads to another facet of being a winning player. To be a winner in the long run you have to be able to grind. You also have to be able to go down in limits and still play optimally. That is a lot harder than it sounds when you have been used to playing $5/$10 blinds no limit Holdem and all of a sudden you are back to $1/$2 blinds. The stark reality is that to win in the long run the cash games you need to be somewhat of a nit. Many players cannot stomach the hours of boredom this takes.

Perhaps their daring-do got them to the dizzy heights of where they are now, but it’s those same “creative” plays that are going to send them to the poorhouse.

Having said all that one has to factor in one’s lifestyle and circumstances. If you are young and have no family to support and no heavy debt in your life then by all means give a bigger game a shot. You’ll have fun, learn something and maybe even win a few nice quid.

If however you are relying on poker for the rent and other serious matters then you have to nurse every penny. Table selection is of crucial importance here too which includes shot-taking. By that I mean if your normal game is no good maybe the next level up has got a few Charlie Chuckaways sitting in, so now would be a good time to take a shot.