Many people who do some reading and research on the subject of money management start to think that the be all and end all of it is to have a certain number of buy-ins per level. If you are going to play NL50 then the books advise at least twenty buy-ins and that means $1000. Or to reduce your risk of ruin then you may want to try thirty or even forty or fifty buy-ins. The level of bankroll is a requisite of skill and also your opponent’s skill and also how volatile the poker games are at your level.

But let us say that a player had a bankroll of $5000 to play NL50 full-ring. This is a huge bankroll for that level of game but yet our hero is good enough to assess that he does not have the skill yet to play NL100. So even though he is massively bankrolled for his level then can it be said that he is practicing good solid bankroll management? Well he may be but then again he may not. Let us change the equation some more and that this player was not a proven winner at this level. There are many factors involved in bankroll and money management.

This is linked to financial trading in many ways because if we assume that someone else had given you this $5000 instead of it being your money then suddenly we have a different equation. If you had given this player $5000 to play poker then they are effectively managing your money and so the money management aspect of the project is their responsibility. So we can deduce then that this is a very big responsibility for this player to have but let us now look at what sort of things this player could do to make us think that they were not managing our money all that well.

If they tilted then by sheer definition then their playing decisions would be worse which is hardly managing our money professionally and responsibly now is it? Or what about if this player couldn’t be bothered to find beatable games or the better games then they would be guilty of lowering the earn rate and also the level of variance by playing dynamic. Once again this is irresponsible management of our money. If this situation were real then we would be very unhappy with the behaviour of our money manager wouldn’t we!

We may even have a word with them or even take the action of sacking them and giving the money to someone else. However this is what many poker players do with their own money even when they are theoretically and correctly bankrolled for their level. This is before we even consider the effects of how playing individual hands affect variance and how this too can be unsuitable to our overall money management philosophy. If you absolutely hate variance then you would be having in depth discussions with your manager/poker player to play in such a way so as to lower variance and this means playing in a more defensive style. So money management is a very involved topic and one that deserves very careful attention.

What stakes to play and when to move up or down My personal rule for managing my bankroll is: I want to have around 30 buy-ins for the stakes I’m playing at. If you are playing poker for a living, you should obviously keep money for poker and living expenses separated. On the other hand, if you are just a casual player you don’t have to be so precise with your bankroll because you can probably deposit some money again if you go broke. If you go down to less than 20 buy-ins, it’s probably safest to step down a level and grind there for a while to build it back up. If you grow your bankroll to 30 buyins for the next level, you can try to move up. Although it may be a good idea to use a little bigger bankroll when moving to a higher level, since you will be playing stonger opponents there and it may take some time to get used to the different way of playing there. Following these bankroll management rules will minimize the risk of going broke. In addition cash game tools can be helpful in your games.

Why bankroll management ? The main reason to follow some rules on bankroll management is just so you don’t go broke. If you only have $100 on your poker bankroll, you don’t want to risk all of it in a single hand. Suppose you have pocket aces and go all-in before the flop, you have an 80% chance of winning that pot, most likely you will win this hand. Now repeat the same thing 100 times, you are likely to lose that hand 20 times, so if you have your whole bankroll on the line every time, you are very likely to go broke if you play with your entire bankroll at the table. There will always be times when the cards are not going your way and you may lose several sessions in a row, even if you are the best player at the table.

Example situations: If you have $800 in your bankroll and you want to buy-in to no limit holdem cash games for 100 big blinds, you should be playing 10c/25c blinds and buy in for $25. Since the next level up is 25c/50c and you want to buyin for $50 there, you should have $1500 in your bankroll before you move up to those stakes. On the other side of the coin, if you lose some sessions and you are down to $400 in your bankroll, you should move down in stakes to the 5c/10c level and buy in for $10.

This covers bankroll management for cash tables, next month we will discuss: Cash games – Deep stacked play.