Online poker is a fickle beast. One day you’re up, the next day you’re down.
The concept behind bankroll management is simple: every time you play online poker, you play at a certain limit and always have enough money in your bankroll to absorb the downswings that are a regular occurrence in poker.
For instance, say I deposit $50 into a poker room and sit down with my entire bankroll at a $1/$2 cash game table. This is bad bankroll management. Why? For one, I have my entire bankroll invested in this one cash game. One bad beat or one unlucky card and I’m broke.
The general rule of thumb is to have no more than 5% of your total bankroll on the table at one time.
You read that right. Only 5%.
Say you wanted to play a $.50/$1 cash game table with a $100 max buy-in. Per bankroll management guidelines, the size of your bankroll should be at least 20 times the buy-in for pot limit and no limit Hold’em cash games. So you should have $2,000 ready if you plan to buy in for $100 at a $.50/$1 cash game.
For SnG (sit and go) tournaments, you should have at least 40 times the full buy-in. So if the buy-in for the SnG is $20+$2, you should have a bankroll of $800.
If you are playing limit Hold’em, you should have a bankroll of 300 big blinds. So to play $.50/$1 limits, you need to have at least $300.
Slight variations to consider
If you tend to play at short-handed tables (6 players or less), you will inevitably be involved in more pots, and as a result, you should increase your bankroll accordingly.
Another variation to consider is your playing style. For example, if you know you are a tight player who generally only plays good hands from good position, your chances of losing big pots is less than a loose player who plays a lot of drawing hands.
The number of pots you play should be in direct relation to the amount of money you have in your bankroll. In other words, if you are a loose player and thus are involved in a lot of pots, you should have a larger bankroll to cover the highs and lows that this style of play brings.
Why you need such a large bankroll?
As I stated before, having a large bankroll protects you against the natural fluctuations that are part of the game of poker. We’ve all played a hand perfectly and still lost. We’ve all had a bad run of cards where it seems like no matter how good our hand is, someone has a better one.
Poker is a game of upswings and downswings. When you are going through a rough downswing—either you’re not getting the cards or your opponents are catching cards against you—wouldn’t it be better if your whole bankroll weren’t invested?
In a heavyweight boxing match, sometimes the fighters have to cover up and hang on to their opponent in order to conserve energy. If one fighter punches himself out and uses up all his energy by the second round, he’ll end up leaving himself wide open for a knockout. You’ll have that same vulnerability if you don’t play at the appropriate levels for your bankroll. If you go for broke right away, you will be broke!
This also applies on an emotional level as well. Say I buy in at an online poker room for $100 and sit down with my entire bankroll at a $1/2 cash game. After a raise and a re-raise before me, I go all in with pocket Aces. One guy folds, but the guy after him calls with Kings and catches his card. Game over man, game over.
No matter how good of a poker play you think you are, you cannot defeat luck, but you can lessen its negative impact.
Moving up or down a limit according to your bankroll
Probably the single hardest thing for an online poker player to do is move down a limit because he cannot uphold the 20 buy-in or 5% of your bankroll rule of thumb.
It gets a lot of poker players in trouble because they are too obstinate to move down a level. They think they are “above playing that low.” Many times they’ll even move up a level in order to win their money back faster.
If you play online poker hoping to win quick money, you will not have much luck.
On the other hand, if you find yourself above the 20 buy-in rule for the limits your are playing at, go ahead and move up the ladder to the next level.
The Chris “Jesus” Ferguson Challenge
Perhaps the greatest example of poker bankroll management comes in the form of poker pro Chris “Jesus” Ferguson.
Around ten years ago Chris embarked on the original “bankroll challenge.” He challenged himself to turn $1 into $20,000 playing live, face-to-face poker. Not only did he accomplish the feat, but he did it in only six months.
Fast forward to April 2006. Chris had a new goal. He wanted to turn $0 into $10,000 by playing online poker. He donned his classic black cowboy hat and went to work. He earned his first win—a robust $2—by placing in a Full Tilt freeroll with over 900 players. He decides to buy into a $.05/.10 NL Hold’em cash game with his entire $2 bankroll. He put all his chips into the pot on a coin flip and lost. It was back to the freeroll drawing board.
Chris cashed in eleven freeroll tournaments for a total of $22 before he graduated to games with real-money buy-ins. After that, he adhered to a strict set of guidelines. He maintains, however, that there is “no statistical analysis behind this” and he thinks sitting at a table with 5% of your total bankroll is “kind of high. Even at 5% I may have some big swings which can uncomfortable.” Here are his guidelines:
- He never bought into a cash game or a Sit & Go for more than 5 percent of his total bankroll. The only exception was at the lowest limits: he was allowed to buy into any game with a buy-in of $2.50 or less.
- He didn’t buy into any multi-table tournaments for more than 2 percent of his total bankroll. The only exception was $1 MTTs.
- If at any time during a No-Limit or Pot-Limit cash-game session the money on the table represented more than 10 percent of his total bankroll, he had to leave the game when the blinds reached him.
The key that makes the strategy succeed is that when you lose, your bankroll goes down, [therefore] the games you play in have to go down.
In September of 2007 Chris finally achieved his $0 to $10,000 goal. Upon reaching 10K, he donated his winnings to the Save the Children Foundation.
As of December 2010, Chris has taken his bankroll to over $130,000.
When it comes to bankroll management, Chris “Jesus” Ferguson said it best:
Everyone is going to go on a losing streak. It doesn’t matter how good you are…sticking to the rules is the best way to get over the rough patches. The rules should absolutely never be broken.
How do you manage your online poker bankroll? Do you set any guidelines, and has it worked for you?