Bankroll managementThis article was posted on December 7, 2007
In poker, bankroll management is quite a bit different from just about any other casino gambling genre. While in sports betting you have some pretty clear guidelines as to how you should use the money available to you for that purpose (use about 3% of your roll on any bet, and never use more than 5%, no matter how good you feel about it) in poker it is all quite a bit different.
There are no clear rules about it, but one thing is pretty clear: the larger stack will not only be able to swallow more variance, it'll also dominate smaller stacks in a cash game (or in a tournament too for that matter). In order to illustrate how the larger stack bullies the small one around let's take a look at a typical example: in the late stages of a Single Table Tournament one player has an overwhelmingly big stack, while another one is merely getting buy on a 3 times BB+SB one. Our guy with the big stack can afford to repeatedly attach the under-stacked fellow directly, by raising him exactly as much as his whole stack, and thus making every decision a do-or-die one for him. If our guy on the thin stack loses, he busts out, if he wins, he merely postpones the inevitable. It all has to do with the implied odds of an all-in, which become very adverse for an under-stacked player.
While in a tournament one has to work to establish such bankroll-dominance, in a cash game, the odds can be influenced from the get go via the buy-in. Basically, the more money you buy in for, the more advantage you'll have secured for yourself. This is exactly the reason why most poker rooms set clear limits on how much money one can buy in for at a given limit/stakes table. If left uncontrolled, things can easily get out of hand, and turn into a frenzy in which those who can push more money in will do most of the feeding.
If you are kind of low on cash (aren't we all?), make sure you don't play at a limit where you're under-bankrolled. Experts generally agree, that in order to consider yourself properly bankrolled, you need to have at least the equivalent of 300 BBs (Big Bets) for Fixed Limit Holdem and 20 Buy-ins for No Limit Holdem, in your roll at the limit you intend to play at. That's pretty straightforward: you move up to the desired limit as soon as you accumulate 300BBs(20 Buy-ins). Let's suppose though that the first big bet that you make you lose. Should you move straight back down (this is the scenario nobody really has an advice for)? Well, not really. As soon as your bankroll nears 200-250 BBs(12-15 Buy-ins) though, you should indeed consider that option. Why so? Because if you lose that much, not only will you slowly fall into the "under-bankrolled" category, you'll also have to consider that there might be some other reason for your not being successful (too stiff an opposition at that particular limit, you're not playing your best because of the increased pressure etc.)
Whatever you do, never underestimate the power of being properly bankrolled. The nature of online Texas Holdem requires that your bankroll be capable of surviving some pretty nasty swings.