Bankroll Management

1. Preserving capital, accumulating money, and maintaining a low risk-of-ruin comprise the core aspects of "bankroll management."

Time Enough for Counting

There are a variety of skills, talents, and characteristics that determine long term success in poker.

One of the most important of these aspects - bankroll management - is also perhaps the most mundane. It simply describes the ability to manage poker capital in a way that creates the lowest chance of going busto.

Basic Rules

The biggest reason poker players need to practice good bankroll management is variance, which is a term that describes the natural ups and downs - also called swings - of poker. Because variance is impossible to avoid, the only way to combat it is to play within your limits - that is, at stakes that won't busto your roll.

The table below is a numeric representation of what constitutes 'Good', 'Moderate', and 'Bad' bankroll management in cash games, MTTs and SNGs. The Good category represents players who need to practice strict bankroll management because it's their livelihood and they can't afford to go broke. If you're a winning player, there's almost no chance you will lose your roll if you use 'Good' bankroll management. The Moderate category represents players who are attempting to make a serious income from poker, but can probably handle a hit or two to the roll. It's still unlikely that you'll lose your roll using 'Moderate' bankroll management, even if you experience a bad downswing. The Bad category represents players who are willing to go to Bustotown because in the grand scheme of things, their roll is insignificant. You might not go broke if you practice 'Bad' bankroll management, but it's certainly more of a reality.

Taking Shots

Taking shots, at least for some poker players, is what keeps them sane. And to a certain degree, taking shots is actually okay, as long as you're smart about it and realize you can't afford to take them too often.

For ring game players, moving up just one level can definitely be considered a shot. Moving up a level in search of that big session is fine, but make sure you set a stop-loss number and adhere to it strictly. At the very least, don't keep playing if you lose more than 8% of your bankroll.

For tournament players, the best way to take a shot is by playing a large MTT with an overlay. It can be up to twice your usual buy-in and still be worth it because of the added value of the overlay money. However, any shots you take shouldn't exceed 5% of your bankroll and you shouldn't make a habit of it.