Bankroll Advice:

How to Manage Your Money


In poker your bankroll is your life line.  Once it’s out so are you.  One of the first things to master in poker is how to manage your money so that your bankroll will support your playing. 

The bankroll simply put is the amount of money you bring to the table, or in online poker the amount of money in your account you have to play with.  Like everything else in poker, there are strategies for making the most of your bankroll and even building it up for next to nothing.

The first key is knowing how to play.  If not you’ll only be losing your bankroll and pretty quickly.  There are perfect opportunities for learning the game through free games online.  Almost all online poker rooms offer games that can be entered with play money, or in actuality for free with no money involved. 

There you can test the waters to find which game you prefer, the stakes that you’re comfortable with and the playing style that affords you the highest win rate.  All this will help you in determining how to manage your bankroll responsibly once you play for real money.

The next thing that you need to know is how rake affects the amount of money you net.  The rake is the portion of the winnings that the house takes.  There are numerous ways this is calculated and is usually either a percentage of each pot or an entry fee for tournaments. 

When calculating the amount you need in winnings to support your bankroll the rake that will come with the winnings and consequently reduce the pot equity must be factored in and deducted to come up with true numbers.  

When trying to determine how the rake will affect what you will potentially make you must consider the other players styles and win rate.  This is because only the winner who receives the pot is ultimately paying the rake, however everyone in the game is affecting the amount the rake will be.  Loose players with low win rates will only increase the pot yet hardly win, therefore they will be feeding the pot but also increasing the amount of rake being paid out.

The next factor that must be considered when managing your bankroll is variance.  No matter how good a player you are sometimes the cards just aren’t in your favor.  That means there will be ups and downs to your winnings and bankroll and this is called variance.  Variance is short term and can differ from your long term or average results. 

In order to avoid going bust you must determine a bankroll amount that will support the variance of your winnings.  This can be done using the stakes of the game and number of hands you can play for a certain amount. 

You must be able to play enough hands to survive a possible bad streak at the beginning of playing so that variance can take its course and lead you to better hands.  To do this you need to take the stakes of the game and multiply the big bet limit of the game with the numbers of hands needed to play. 

The exact number of hands needed to play for a bankroll to survive variance varies from player to player and depends on the level of risk you want to take.  For example if you’re less conservative and playing a game with $1/$2 stakes you should have 100 times the big bet of $2, or in other words your bankroll should be at least $200 to support you.  If you’re playing more conservatively for less risk up it to 200 times the big bet and put your bankroll at a minimum of $400 to start.  Again when calculating your needed bankroll for variance there’s no set number, but it should be high enough to support a losing streak.

That said players should realize there are a number of elements that will affect the variance of your playing.  The most influential element on variance is your win rate.  It’s only logical that if you win a higher percentage of the time you’ll have less variance to your bankroll.  This is where learning the game and knowing how to play will help decrease the variance of your game making it easier to predict how to calculate the bankroll you need to have.

In connection with this, a player must to able to keep there mental game in tact during a losing streak.  There will be times when even the pros can’t catch the cards they need.  It’s then that a player must keep a cool and play with logic not emotion.  If not the player can easily lose there concentration leading to more hands being lost.

Another factor with substantial affect on variance is playing style.  Typically those with looser and more aggressive playing styles will see a larger disparity to the highs and lows of their bankroll at the same rate of play as compared to that of a conservative, tight player.  Because of this those with a looser or more aggressive playing style must have a larger bankroll to cover a heavy loss without going bust before a big win.

You can’t forget that there are other players at the table and just like rake they can have an affect on your variance.  If there are players that are more aggressive and loose they will cause your variance to go up slightly along with theirs.  Though the highs and lows of your bankroll may be larger your chances of winning against such players should go up as well.

The number of players at the table will also alter your variance.  In tournaments the more players there are the higher your variance will likely be because you are statistically less likely to make it to the top seats and prize money. 

Other considerations in tournaments that need to be thought out to determine variance and bankroll size is the payout structure and if there are rebuys.  If the prize pool is large but steep your variance will be higher thus a larger bankroll is needed.  If there are rebuys the cost of those rebuys must also be factored into the bankroll needed if you’re going to use that option.

For ring games it’s the opposite.  The less player there are the more variance there’s likely to be, with head’s up games having the highest variance.  In these situations you must play more aggressively because there’s only you and a solitary opponent.  As we already know this type of playing requires a high win rate to support your bankroll.

It’s worth noting here that in addition to your total bankroll for your long term playing over time some players also calculate their session bankroll.  Session bankroll is simply a short term version of determining the amount of bankroll needed to support a player for a certain game for that day or playing session.  This short term calculation still needs to take into consideration your entire bankroll decisions as it will affect the whole.  This means session bankrolls should ideally have zero negative affect on your long term bankroll.

After determining your variance and having a good idea of your win rate you need to create a ceiling and floor for determining win you should be playing on a different level.  The floor is when you reach a certain amount in which you need to move down a level because of a losing streak.  The way to determine what your floor will be is similar to calculating your bankroll for variance. 

For your floor take the big bet amount and multiply it by the maximum number of hands you can comfortably lose without endangering you bankroll.  For example, if you are playing a game with the stakes of $5/$10 and you have set the 200 big bets as your floor your bankroll must be $2000.  Once you reach this floor you need to move down a level or you are risking further losses that could cripple your bankroll at those stakes.

Your ceiling is determined in the same way.  Once you have reached a certain number of hands at certain stakes you can move up one level if you’re comfortable.  For example, if the stakes were again $5/$10 and you’ve set your ceiling at 300 big bets once you make that and your bankroll is now at $3000 you can move up a level.  If you move up or down a level then your ceiling and floor needs to be recalculated, and it is extremely important that you stick to the numbers you’ve established.

If you’re playing ring games you can calculate the floor and ceiling for moving levels based on a percentage of your bankroll.  This should be a specific number that represents how much you can lose at a higher level without crippling your bankroll.  This means it should not be more than 10% of you total.  Only once your bankroll has increased enough to cover that loss should you move up a level, and if you are losing at that percentage you should move down.