I get asked about this a lot. Seriously, a lot.
During almost all my streams at least one person will ask something about bankroll management strategy -
"I'm trying build a roll with MTTs, what bankroll management do you recommend?" or "What bankroll management strategy is best for SNGs?" or "I just moved up stakes, what kind of bankroll management should I use?"
"I'm trying build a roll with MTTs, what bankroll management do you recommend?" or "What bankroll management strategy is best for SNGs?" or "I just moved up stakes, what kind of bankroll management should I use?"
The 1st thing I want to say about this rather gargantuan topic is that there are no right or wrong answers, there is no rule to Bankroll Management or BRM. With that in mind, here is something you want to consider:
Is your bankroll re-loadable?
If you are in a well paid job and you have extra money available to you each month and poker is your hobby or passion then you have more flexibility than most. Losing your bankroll doesn't prevent you from playing in the future so it is simply up to you how much you want to gamble it and take shots. For example, do you want to play 4x $215 a month and stop there if you don't cash any of them or play 50-100 tournaments of smaller buy-ins because you love the game? Do you want to spin it up or do you want to play lots of poker? Maybe you want to do both.
What you must know is how likely various outcomes are. To do this, you need to do is plug 6 variables into a calculator and you will be shown the relevant statistical data from EV to confidence intervals while showing you projections of what you can realistically expect. When you have a better idea of tournament variance, you can use this knowledge to help you decide what type of bankroll management strategy you want to use. You can find out exactly how to do this in the next section.
Ok, so maybe your bankroll isn't re-loadable. You have one poker bankroll and you are paying the bills with your "life roll". If you lose your poker bankroll, you cannot top it up or re-load it.
For example, you have saved up $200 to use on poker but have no extra money coming in. Losing the $200 would mean you can't play poker any more. There may be a time in the future when you can add to your bankroll but as things stand, you have this one bankroll and if you lose it, it's gone. This is a common situation and from a Bankroll Management perspective your primary objective here is to minimise the "risk of ruin". As poker players like to say: "I don't wanna go busto".
If you are in a well paid job and you have extra money available to you each month and poker is your hobby or passion then you have more flexibility than most. Losing your bankroll doesn't prevent you from playing in the future so it is simply up to you how much you want to gamble it and take shots. For example, do you want to play 4x $215 a month and stop there if you don't cash any of them or play 50-100 tournaments of smaller buy-ins because you love the game? Do you want to spin it up or do you want to play lots of poker? Maybe you want to do both.
What you must know is how likely various outcomes are. To do this, you need to do is plug 6 variables into a calculator and you will be shown the relevant statistical data from EV to confidence intervals while showing you projections of what you can realistically expect. When you have a better idea of tournament variance, you can use this knowledge to help you decide what type of bankroll management strategy you want to use. You can find out exactly how to do this in the next section.
Ok, so maybe your bankroll isn't re-loadable. You have one poker bankroll and you are paying the bills with your "life roll". If you lose your poker bankroll, you cannot top it up or re-load it.
For example, you have saved up $200 to use on poker but have no extra money coming in. Losing the $200 would mean you can't play poker any more. There may be a time in the future when you can add to your bankroll but as things stand, you have this one bankroll and if you lose it, it's gone. This is a common situation and from a Bankroll Management perspective your primary objective here is to minimise the "risk of ruin". As poker players like to say: "I don't wanna go busto".
Tournament Variance Calculations
Example:
You want to play around 50 MTTs every month and your average buy-in (ABI) is $85. Average field size is 1400 and your ROI is 4%. Fill in the table as follows:
You want to play around 50 MTTs every month and your average buy-in (ABI) is $85. Average field size is 1400 and your ROI is 4%. Fill in the table as follows:
Number of players: average field size
Payout structure: the % of players paid can be found out from the tournament lobbies.
Buy in: ABI - rake
Fee: this is the rake and is usually roughly 10% for MTTs
For an ABI of $85:
rake + buy-in = 85
85/10 + buy-in = 85
8.5 + 76.5 = 85
To find out your ROI and statistics like average field size opt in on www.sharkscope.com and search for your player name.
When you have filled in the boxes click "calculate", wait a few seconds and scroll down...
if what you see scares you - then it might be time to abide by some sort of BRM.
Payout structure: the % of players paid can be found out from the tournament lobbies.
Buy in: ABI - rake
Fee: this is the rake and is usually roughly 10% for MTTs
For an ABI of $85:
rake + buy-in = 85
85/10 + buy-in = 85
8.5 + 76.5 = 85
To find out your ROI and statistics like average field size opt in on www.sharkscope.com and search for your player name.
When you have filled in the boxes click "calculate", wait a few seconds and scroll down...
if what you see scares you - then it might be time to abide by some sort of BRM.
My recommendations
For MTTs use 200x your ABI
Be flexible as your bankroll changes.
Eg: $1000 starting bankroll - play with an ABI of $5 (which still allows you to play the odd $22 or even $55 MTT) as long as you even it out by playing some lower buy-ins too.
If your bankroll grows to $1400, then your ABI should now be around $7.
If your bankroll drops to $700 then reduce your ABI to $3.5.
For SNGs use 50x your ABI
Be flexible as your bankroll changes.
Eg: $1000 starting bankroll - play with an ABI of $5 (which still allows you to play the odd $22 or even $55 MTT) as long as you even it out by playing some lower buy-ins too.
If your bankroll grows to $1400, then your ABI should now be around $7.
If your bankroll drops to $700 then reduce your ABI to $3.5.
For SNGs use 50x your ABI
Notes
In my opinion this method allows for winning players to grow their roll and increase their ABI simultaneously. During downswings, you gradually pull in the reins. Assuming the downswing ends you cannot go busto like this.
It should be noted that for players that are losing, there is no bankroll management that will transform you into a winning player and your bankroll will be expected to drop over time.
However, for people playing just for fun who may or may not be losing, I believe this form of BRM will be effective at maximising the amount of poker played and minimising the chances of going busto. It will also allow you to take shots if you wish and minimise loses if things go badly.
It is good to note that all you need to make is this work is the discipline to lower your ABI when you are on a downswing. Even if you are a losing player and starting losing immediately, as you continue to play lower and lower stakes you will likely reach a point where you become a winning player either because the games have gotten easier or you have improved or both.
Nothing is set in stone, I am not intentionally advocating aggressive or passive BRM. Use less than 200 ABIs or use more, it really isn't that important. Of course, if you have unlimited resources you will always play the nosebleeds as long as you are a winning player as this maximises EV. Unfortunately, not many of us are in this boat. I simply believe that as long as you have the discipline to lower your ABI when on a downswing you stand a very good chance of outlasting the brutality of variance and staying sane.
Good luck!
Solidthought
It should be noted that for players that are losing, there is no bankroll management that will transform you into a winning player and your bankroll will be expected to drop over time.
However, for people playing just for fun who may or may not be losing, I believe this form of BRM will be effective at maximising the amount of poker played and minimising the chances of going busto. It will also allow you to take shots if you wish and minimise loses if things go badly.
It is good to note that all you need to make is this work is the discipline to lower your ABI when you are on a downswing. Even if you are a losing player and starting losing immediately, as you continue to play lower and lower stakes you will likely reach a point where you become a winning player either because the games have gotten easier or you have improved or both.
Nothing is set in stone, I am not intentionally advocating aggressive or passive BRM. Use less than 200 ABIs or use more, it really isn't that important. Of course, if you have unlimited resources you will always play the nosebleeds as long as you are a winning player as this maximises EV. Unfortunately, not many of us are in this boat. I simply believe that as long as you have the discipline to lower your ABI when on a downswing you stand a very good chance of outlasting the brutality of variance and staying sane.
Good luck!
Solidthought
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