The Importance of Bankroll Management

To be able to withstand any amount of bad variance when playing poker you must have a good sized bankroll to withstand the downswings when you may be playing well but just running bad. Even the best players can easily go on big downswings, so prepare yourself for the worst case scenario so you can ride out of the downswings.

A really bad scenario to be in would be losing your entire bankroll because you didn’t adopt strict bankroll management guidelines, only to realize there is a really soft game you could have played in, but you can’t get involved in the action because you’ve lost your roll. That is just flushing money down the toilet because you weren’t smart about bankroll management.

Bankroll management is crucial for a few reasons. Obviously the main reason to follow BRM is so you don’t lose everything you deposited. You may not have other money to deposit. Second, by being smart with your bankroll will allow you to move up in limits as you gain confidence in your game.

The reason this point is important is because earnings as you gain skill is exponential, the 400NL players aren’t twice as good as the 200NL players but you can earn twice as much. This is why it is so important to get to the higher limits because you can grow your bankroll at a much quicker rate.

It turns out that the optimal way to use your bankroll is to play with at least 20-30 buy ins for the particular limit you are playing. So if you were playing 100NL you would want at least 3 thousand. Some players would advocate having even more then $3k for 100NL especially if you are multi-tabling to withstand the variance, but I think the 30 buy in as a minimum rule is still fairly conservative if you are a disciplined player who is not spewing money left right and center due to tilt.

Shorthanded games have higher variance so the bankroll requirement goes up even more. In saying this you play more hands in short handed games so if you are a good player it makes up for the variance to a certain degree.

If you are playing sit and goes or multi-table tournaments instead of cash games, BRM still applies and is easily calculated. Never play in a SNG or MTT with more then 5% of your bankroll.

Hopefully the information in this article will get you thinking more about bankroll management. Neglecting proper bankroll management is a common mistake many new players make. Don’t make the same mistake.

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