Bankroll management

A poker player's bankroll is the total amount he or she is willing to risk playing poker. Once the bankroll is gone, the poker stops (in theory at least).

Bankroll management is one of the most important skills for a successful poker player. Many a winning poker player has been undone by playing at too high a level for his bankroll. The reason is that poker is still a game of chance - even if you are a winning player, a bad run of cards will cause you to lose money. You need to play at low enough limits that your bankroll is able to absorb the bad runs, and keep you in the game until the cards turn good again.

My rules of thumb are as follows:

• Playing no-limit, pot-limit or SnGs, I am will not usually put more than 1/20th of my bankroll on the table
• Playing limit, I usually buy in for 15 big bets, and again put no more than 1/20th of my roll on the table
• For MTTs, I usually risk less - perhaps up to 1/50th of my roll
• Perhaps most importantly, only play at a limit or table that I am fairly confident of beating. This sometimes means playing for a lot less than 1/20th of bankroll, if I am not yet confident of beating the next limit up.
  

These are only guidelines, and I may break them in the right circumstances. For example, I may play a higher limit if I am chasing a big fish, or if it looks like a particularly profitable game. When my bankroll was very small, I was often playing for more than 1/20th, but in games that I was very confident of beating. Another occasional exception is chasing bonuses - where playing super tight at a higher level table can be the most profitable strategy.

The most important thing is to be disciplined about bankroll management. If you move to a higher limit, and find yourself losing, it is very important to move back down a level when your bankroll is no longer big enough for the limit. It is very easy to bust out while chasing your losses at a too-high limit.

There is nothing magic about the 1/20th ratio, it's just what is comfortable for me. Others may be comfortable risking more or less. But if you do risk a higher percentage of bankroll, discipline in moving down a limit is even more important.

Note: These strategy posts may sound as if I am preaching to an audience. I am quite aware that my blog audience is approximately zero. These posts are written with the purpose of clarifying my own thought, and keeping track of my own progress and thinking in poker.