Every new poker player will have to become familiar to the principle of bankroll management. This is about ensuring you play with enough money to cover variance, and hedge your risk for large downswings effectively.
Because poker is largely a game of luck, the principle of bankroll management is extremely important in the game. Playing at the wrong tables can make you go broke very quickly. The following article provides some tips and guides to controlling your bankroll.
Cash Games Bankrolls
Although opinions vary, it is generally accepted you should have a total bankroll covering at least 20 buy ins to a table (a buy-in is the amount of chips you come to the table with when sitting down at a cash table). More importantly, the amount you buy-in with should cover at least 100x big blinds in No Limit Holdem. For example, if you want to play at a $1/$2 table you’re going to need a table buy-in of about $200, and a total bankroll of $4000. Although this seems like a lot to new players; experienced professionals will tell you bad beats combined with variance can dig away up to 40% of your total bankroll.
Some new players find they make more profit earlier on than others. This is the whole variance paradigm – that some players will make $100 on their first day; others may lose $150. Remember however, just because you start making money early on doesn’t mean you should move up the stakes. Moving up the stakes isn’t just about having the right bankroll. It’s also about improving your game and stepping up to the next level. With higher stakes come better players; so don’t assume because you can beat NL50 you’ll make twice as much at NL100.
Tournaments & SNG Bankrolls
Like cash games, there are guidelines to the type of tournaments of SNG games you should be playing. A rule of thumb is that you should have a large enough total bankroll to cover 40 buy-ins of the tournaments or SNGs you’re playing. The figure is so large because of the unlikelihood of winning or cashing out from these tournaments. In multi-table tournaments and MTT Strategy in particular, tournaments can run up to several thousand players; with only the top 5-10% receiving payoffs. Thus, if you’re entering a tournament with a buyin of $5; you should have at least $200 in your total bankroll.
The important thing to remember here is that coming in the final tables of these tournaments usually provides massive rewards e.g. 100% return on investment. If you buy-in for $5 in a multi-table tournament, you can expect to make over $500-$2000 easily depending on the type of tournament and whether it has a guaranteed prizepool. Winning these tournaments will increase your bankroll to a substantial amount where you can start entering large tournaments with higher buy-ins.