The term bankroll management is used to describe certain parameters or in the guidelines for use when playing poker. In simple terms, this is the amount of money you will need to buy within a certain limit.
Managing your bankroll when it comes to poker is a very important skill. This can be ignored by many players and these players often go bankrupt. Not because they are bad players, but because they buy into the game they can’t afford.
In poker people lose at some point. Even the best players in the world don’t win all the time. Poker is a numbers game and at times these numbers are not in our favor. In the long run they even come out and the better players will stay as long as they use proper bankroll management. We call this variant or swing in the poker world.
To avoid going broke when you experience a downswing, (which you will at one point) you need to know what proper bankroll management looks like.
In cash games or ring games, you will hear different rules from different players. A general rule of thumb that guarantees you never go broke is to have 50 buy ins. This is a bit on the safe side, but will definitely keep you from going broke (as long as you are a winning player), losing players will be broke regardless of how much money they have at some point.
For example if you plan to play limit which has.25.50 blinds and buy max at $50, you will need to have $2,500 in your bankroll. Like I said this is a little on the safe side, but it is highly recommended to follow a more secure management scale when first starting out.
If you are an SNG or MTT player then you will need a much larger amount of buy ins. The reason is because of the higher variance involved in this type of game. You can go a long time without winning a tournament and your bankroll will decrease before your eyes.
There are two ways to determine bankroll for both MTTs and SNGs. For MTTs I would recommend using a percentage scale. Since buying INS for tournaments varies over time you buy into specific games based on what percentage of your bankroll it represents.
A good rule for MTTs would be 3% of your money. What this means is that the buy in for a given tournament should not exceed %3 of your bankroll. For example, if you have a $500 bankroll, the highest buy in you can play will be $15. This will cover the cost of a site charge. So, in 12+3 buy will be the current high.
If you are like a lot of people who play multiple games at once then you need to be vigilant in keeping track of where your bankroll stands. If you buy into 10 tournaments at once your money is gone. Since we’re not going to cash out or win much of this, then the next set of games must be at a lower buy in to ensure the survival of our bankrolls.
For SNGs, we can stick with standard buys in rules as in cash games. We still need to go with the higher number of buy ins because there is more variance but it is much easier to track. I recommend and most other professionals will too, is to have 100 buy ins. This means if we had a $500 bankroll to start with, we could play a $5 buy on SNGs.
Another important part of bankroll management is moving on the limit. In order for our reels to grow faster we have to play higher limits where the money is obviously higher. We have to set the rules when we can move in the limit. The same rules will apply to this. If we played $5 SNGs, then we would need $1,000 to start playing $10 SNGs. For cash games if we play 50 nl with 50 buy in the rules. We will need $5,000 to go up to 100nl.
If you start to lose a lot it is smart to move down the limit until your losing streak subsides. Once you reach the rule of 100 in buy for the limit you are playing then it is safe to go back up.
This can be frustrating at times when you have to play lower limits and you are not making a lot of money. Yet this is what will separate us form the losers. I have seen many great players go bankrupt due to poor bankroll management. It’s the people who use these skills wisely who stick around for the long haul.