How to Manage Your Bankroll, the Right Way

The term “bankroll” in poker refers to the amount of spare money you use to play poker with. There is a right way and a wrong way to manage your roll. Good bankroll management would mean you always have enough money to play poker, even if you have to drop down to a lower stake for a while. Bad bankroll management often means losing all your cash- a disaster if you are a professional poker player.


I talk a lot to my students about “common sense” bankroll management. The reality is most people reading this are not professional players and therefore can afford to bend the traditional idea of a strict bankroll to some degree. I’ll start by explain why we do need a bankroll, how big your bankroll should be, and then how to move up the stakes as your bankroll grows (or come back down if it shrinks).

 

Contents:

Why Do Players Need Bankrolls?

How Big Should My Bankroll Be?

My Recommendations for Your Bankroll

What is a Stop Loss in Poker?

How to Advance The Stakes?

When to Reduce The Stakes You Play?

Summary

 

Let’s start with why you need a bankroll…


Why Do Players Need Bankrolls?

Poker can be a sickening game to play. I’ve had new students drop out at the hint of a downswing before, it can feel like the world is against you. For poker players, there are 3 things guaranteed in life: Death, Taxes, and Bad Beats.


Bad beats are like losing a coin flip. The coin must land on heads or tails, in the long run if you stick with betting on heads, you would win half the flips and lose half. However, when dealing with random events the chance that the coin lands on tails 6 times in a row is only 1/64, if you flip the coin hundreds or thousands of times you are bound to see these runs of repetition several times across a sample.


Take a look at this simulation of a winning poker players luck over 10,000 hands. The average is the black line (5bb/100), but there is a high probability that even this winning player is going to lose several big-blinds. It's only when the sample becomes much larger (100k hands) that most of the lines swing to become positive.

A Graph of Variance in Poker. You can see there are 20 lines on the graph representing the outcomes of 10000 poker hands played by a poker player. Several of the lines are losing money, despite the player being a winning player overall.
How Luck Can Effect You In Poker

How does this relate to your bankroll? If you keep losing hands, experiencing coolers, bad beats and overall poor luck that’s called a downswing. Due to the luck heavy nature of each hand, these downswings can last anywhere from a few hundred hands to a few thousand.

This is a chart of both the extent of a downswing and how long downswings will last in poker
Downswings in Poker- How Bad They Can Be

You therefore need a good bank of cash that you can use as a buffer should lady luck not be on your side for a while. You can see the probability of having a downswing that lasts over 10,000 hands is 43% when your win rate is 2.5bb/100, quite likely.


You need a bankroll as you must keep your poker funding and your life funding separate. I hate to read stories of players who have gone into severe debt because they are playing the stakes they can’t afford- regardless of their skill level. When I ran the poker society at Newcastle University, my first lecture on poker made it very clear: Poker money is for poker and food, bills and life come first. Never gamble outside of your budget.


How Big Should My Bankroll Be?

The size of a bankroll is designed to be a minimum number of big-blinds or buy-ins you keep in your account to mitigate what we call Risk of Ruin (RoR). The RoR is a percentage chance that you get unlucky enough over the course of your playing sample that you lose all your hard-earned cash (go bust). The lower your bankroll is in buy-ins, the higher your RoR. Also, the higher your winrate, the lower your RoR.


If you are a professional player, then you want to keep your RoR as low as possible and strict bankroll management is highly important, this is around 5% chance for a pro. If you are an unprofitable player your RoR will always be 100%, so picking stakes that you can beat to increase your bankroll and skill level is critical for success. You must sacrifice some Big Blinds (BB) to become a better player.


Most people reading this article will have regular jobs and can afford to top-up their bankroll with non-poker related funding, vital for players just starting out. This is where the “common sense” comes into the management of a bankroll.


Common sense bankroll management is about finding a good balance between the stake you want to play, the frequency you want to play and then the amount you can afford to pay into your account each month. If you have more disposable income, you can naturally afford to play a higher stake as you will be able to deposit more into your account to cover the downswings. If you don’t have as much disposable income or set a goal of not depositing into your account (like me), you will have to start out at the lowest stakes and be strict with stop losses.


There is no set bank-roll requirement for any player, there are only guidelines. If you want the answer to the question with a high degree of accuracy, you can check out primedope.com. Simply add in your win-rate (or a guess as to what your winrate is), and it will tell you the roll you need.


My Recommendations for Your Bankroll

Typically, for new players I recommend starting at 2nl with $40 (20 buy ins, 2000bb). Most players can become profitable at 2nl with some coaching or study, so it’s unlikely you’ll need to re-deposit many times.


If you’re a profitable player; I recommend having a bankroll of at least 2000bb

You’ll also want to set session stop-losses to ensure that you don’t burn through your bankroll too quickly. This is especially important if you are prone to tilting. Ideally you can financially afford to top up your bankroll with a sensible amount each week or month.


What is a Stop Loss in Poker?

A stop loss is a simple and effective way of managing tilt and your bankroll. If you lose more than a pre-determined amount in a session, then you stop playing. For example, if I go to play poker one session and lose 3 buy-ins then I will stop playing. That is a 3 buy-in stop loss.


This prevents you from losing all your cash in one go and allows you to always play poker for longer on a smaller bankroll. Personally, I only like to play poker when I am playing my best and there is no risk that I am tilted, I set myself a stop-loss of 2 buy-ins and will often stop playing if I feel my decision making and thought process isn’t optimal.


How to Advance the Stakes

At this point you should have a solid and stable bankroll and be playing more and more poker. Hopefully you’ll get to a point at the stake you’re playing where you are no longer depositing, and it looks like you’ve made some profit. Great! Now let’s talk about the best method for advancing to the next stake.


You want to follow the same bankroll management as you did for your current stake, this time minimising RoR for the stake you’ll be moving into. Which (depending on your winrate) will be around 2000bb


If we continue thinking about a 2nl player starting with $40 in their account. The next highest stake on most poker sites is 5nl. So 2000bb at this stake would be $100.


My advice: grind your way from $40 to $100 and then start thinking about integrating some 5nl into your sessions.


To successfully integrate the next higher stake, you must set a stop-loss each session of only one buy-in at 5nl. Then for the remainder of the session, you should drop back down to 2nl. This is the same method I use for all stakes. You can also play this 5nl session at the end of a 2nl grind.


The next session, provided you have at-least $100 for 5nl, you repeat this method. I like to repeat with the 1 stop loss for a while until I am comfortable playing the stake, this is subjective and depends on what you feel comfortable with. You should then slowly titrate up to your normal stop-loss amount.


Theoretically you can keep doing this method of increasing your stakes as long as your skill level and bankroll increase too. What happens if you experience a particularly bad downswing and haven’t been sticking to your stop-losses?


When To Reduce The Stake You Play

It can be tempting once you have successfully beat your way to a higher stake to stay there, regardless of your bankroll. This only ends badly. To make your advancement up to a higher stake as fast as possible you should drop down to the lower stake as soon as you dip 1 buy-in under the bankroll requirements for the higher stake (hence why the stop-loss of 1 buy-in per session). It can take a long time to build back up to the required bankroll at the lower stake. Making $5 is around an 8 to 10-hour grind at 2nl depending on win rate and hands per/hour played. So, it’s better to keep that grind as small as possible.


Summary:

  • Bankroll is another word for the spare cash you set aside for poker

  • Try to stick to a bankroll, if in doubt, 2000bb is generally a safe roll size

  • Calculate bankroll on the risk of ruin you’re happy with and how much of your income you can use to top it up

  • Set Stop-Losses to prevent you from losing too much in each session

  • Move up when you have 20 buy-ins for the next stake

  • Move down sooner rather than later

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