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