Bankroll management is a crucial poker strategy used by poker professionals that represents a safe way of bankroll handling and helps overcome a period of bad luck and losses (or so called downswing). Learn simple and by practice verified rules of bankroll management.

**Bankroll** is an amount of money or funds set aside by a player for playing poker.**Bankroll management** is a safe way of handling the funds that are at player's disposal. A good poker player must be able to manage reasonably what he has. He must know with how money it is safe to enter the game as measured by a ratio of buy-in towards his bankroll.

For example in the world of finance on the one hand it is not advisable to maintain a too high supply of idle money that could earn somewhere else. On the other hand in poker the opposite is often the case—it is handy to have enough funds so that you can play a sufficient number of hands and thus your advantage over weaker opponents can prevail.

Practically it deals with (1) adjustment of your buy-in towards the bankroll and (2) risk limitation—you can only play the limits enabled by your bankroll.

The risk can be measured by the phenomenon known as the variance, which represents the short-term deviations from the player's long-term profitability (ROI). Even if you play poker with weaker players it may happen for you to have bad luck or actually that the bad luck may stick with you for a certain number of hands (or for a certain period of time).

And if your bankroll is insufficient, you may lose and wipe out your whole poker funds aka the bankroll. In other words your superiority might not have a chance to prevail. Take a look at the variance calculation of a Sit and Go tournament for 9 players.

**Bankroll management stands for a correct/right/safe management of your poker funds.**

Think about the following situation: you are about to play heads-up and you are a better poker player than your opponent. You may choose to play a single hand for $1,000 or a thousand of hands for $1. What is your take?

It is clear that the first way is very risky, a pure gambling. But why to risk if you know that you are very likely able to overplay your opponent gradually? In other words, it is very unlikely that your opponent will be lucky for 1,000 hands. Anyway, it may happen, but we still talk in terms of the probability.

The bankroll management means playing in a such way that you will manage, or you will have a chance, **to overcome bad luck and losses. **Every player is bound to face such a period of time in his poker career. That's why It is essential to maintain a specific amount of your poker funds (bankroll).

On the other side it is not desirable, actually it is a road to hell, to transfer money—right after a successful period of time or after a big tournament won—from your poker bankroll to your private bank account or to cash and spend it on a new car or a new mobile phone etc. You may face the downswing and the rest of your bankroll will be vaporized.

Now you know that the limits you play must correspond in a way to your bankroll and that a failure to stick to this rule (which is kept by professional player one needs to add) may lead to a quick disaster for your whole bankroll in a bad-luck period. The rules for a maximum buy-in for various types of poker games are shown in the following **table of bankroll management**.

Type of Game | Your buy-in should not exceed |
---|---|

Cash game | 5% of the bankroll |

Sit and Go (1 to 3 tables) | 2% of the bankroll |

Big tournaments (multi-tabling) | 1% of the bankroll |

The following examples of various poker games can help you understand how to determine a *suitable limit for your bankroll*, or, which is a reverse procedure, to find out how big your bankroll must be, so that you can play a specific limit in a safe way. That is what the bankroll management is all about.

We will start with the cash game, whereas the maximum safe buy-in is the highest (5% of the bankroll) and we will continue as far as the big tournaments, whereas the recommended maximum buy-in is 1% only.

The reason to be more cautious is a bigger variance (as possible short-terms deviations from your long-term results). If the variance is a new topic for you, it may worth having a look at the page Variance – example, where its meaning and calculation are described in a very detailed manner.

The above-mentioned rules of the bankroll management say that the **buy-in should not exceed 5% of your bankroll**. For instance in No Limit Hold'em the maximum buy-in usually consists of 100 big blinds. The bigger is this number, the better.

It is also suitable to set an *automatic re-buy*. Why? Simply because you can play for more (maximum) money every time you get a promising hand. If e.g. your bankroll shrank to 50 big blinds due to some losses and then you got a nice hand, you would be able to play for 50 big blinds only instead of 100 big blinds, which is a pity and a loss as a missed profit.

But back to the example of *finding a suitable limit*. Suppose our bankroll is `$100`

. The maximum safe buy-in is then `$5`

, or 5% of the bankroll. If we divide this figure by 100 big blinds we will arrive at one big blind amounting to `$0.05`

. Hence a safe limit for the cash game with our bankroll is `$0.02/$0.05`

. Please note that the small blind is always a half of the big bling, but the value is shown in hundredths at maximum and in this case $0.025 is rounded down to $0.02.

The cash game with this limit is titled as **NL5**—it means that the buy-in is $5 and assuming it covers 100 big blinds (as it is usual), then one big blind is $0.05. For instance NL100 means that the buy-in is $100, the big blind is $1 and the limit is $0.50/$1.

**We could also ask the question in a reverse manner.** Suppose you would like to play NL100 (with the limit $0.50/$1). *What is the minimum safe level of bankroll?* We know that the buy-in is $100 and also that it should not exceed 5% (or 0.05) of the bankroll:

Bankroll? × 0.05 = Buy-in $100, hence Bankroll = $100 ÷ 0.05 = $2,000. Your bankroll would have to be at least 2,000 dollars for you to be safe playing this limit.

There is a lesson learned resulting from that: (1) if you want to play higher limits, you have to have a bigger bankroll too, (2) if you manage to raise your bankroll, e.g. by winning or transferring more funds, you can afford to play higher limits (however this approach is suitable only after raising your poker skill, not e.g. after a random winning of a single tournament).

As for the smaller Sit and Go (SNG) tournaments there is a bigger variance than in case of the cash game, since only the top positions are paid. For instance in terms of the 9 player SNG only the top three players are paid. Therefore it is desirable to have a bigger reserve on your bankroll and thus the **buy-in should not exceed 2% of the bankroll**.

Again, if we have e.g. $100, then the buy shall be $2 at maximum. If our bankroll was, say, $200, $500 or $1,000, then we could afford higher buy-ins accordingly $4, $10, $20.

The big tournaments for 45, 90, 180 or more players usually pay only the top 10% of the players. Thus the variance is even bigger than in case of the small tournaments (SNGs) as it is more difficult to get on the paid positions. Also chance/luck/variance plays a bigger role—even if you are a very good poker player, you always need a piece of luck in order to win a big tournament (in other words you cannot expect to be winning all the time)—that's why it is essential to maintain even bigger bankroll. The maximum **buy-in should not exceed 1% of the bankroll**. If we have $100, the maximum buy-in can be $1 only.

Bankroll management is a strategy of safe handling with your poker funds. It is vital for a long-term success to keep the above-mentioned rules and not exceed the maximum safe buy-ins. A good poker player should *resist the temptation of playing higher limits* with insufficient bankroll (in terms of safety) as the first unlucky period could vaporize his bankroll.

On the contrary, if the player makes progress, keeps winning on a more stable basis (raising the bankroll) and feels confident enough, he can *try moving to the higher limits*, whereas he can earn more.

The article is based on my Czech article Bankroll management.

Copyright © 2007–2019 Jindrich Pavelka, Casino-Games-Online.biz – About | Accessibility | Terms of Use | Site Map | CZ version: Hazardní-Hry.eu |