An important aspect of poker is bankroll management. Bankroll management is an essential part of good poker play and if not done correctly can have significant consequences on your ability to play poker and also your psychological well being. This is a short guide to proper bankroll management and a few tips regarding trouble areas and common mistakes that you can avoid.
Variance is a regular occurrence in online poker and can be defined as the difference between your short term results and long term expectation. It should be noted that this includes both upswings and downswings. Obviously, the upswings aren’t so bad however it’s the downswings that really hurt. Even when you get your whole stack in with the best hand before the flop, you might only be a 70% favourite to win the hand. 30% of the time you will lose. In games such as Pot Limit Omaha, people go all in often when only 55% to 45% favourite and consequently, variance goes up. Downswings of over 100 buy-ins below equity are not uncommon. The effects can be significant if you don’t have enough money to buffer these losses. I would recommend you should try and have at least 20 buy-ins if you are playing at one table of a standard game such as Texas Holdem. If you are playing multiple tables, then this number needs to increase. By following this rule, you can avoid on the simplest and stupidest mistakes that adds unnecessary pressure and disadvantages in poker.
Playing with most of your bankroll at the table has consequences. The money starts to take on more meaning and the most significant effect of this is that you may start making bad decisions in order to protect this dwindling bankroll. You may pass up opportunities that have positive expected value, for example a situation where you are 55% to win the hand, you might fold instead and thus in doing so make a mistake. The opposite is also true in that once you get down to your last few buy-ins, you make take on the mentality of double up or go bust, and take unnecessary risks including getting your money in with the worst of it. It is recommended that you only play with money you can afford to lose. Playing with money that is borrowed, or is in other ways required for rent/bills/food is a disaster waiting to happen. This is how a small mistake at the table game can turn into a disaster in the real world.
It is wise to have most of your bankroll in a financial institution that is completely separate to the poker site that you are planning to play at. Having this money in a poker site earns no interest for you, it runs the risk of being lost in a single drunken session and also if your account details are ever hacked or stolen. I recommend having a maximum of 20 buy-ins at the poker site you are playing, and the rest in a bank account, preferably with interest, that is easily accessible. You could alternatively spread the money across several banks and poker websites.
Having a pre-set amount such as a stop-loss is a useful idea. If you were to lose 3 buy-ins, then you quit the session and try again tomorrow. Similarly, if you win 5 buy-ins then you can also quit the session. Trying to maintain regular withdrawals are reasonable as well always trying to keep the same amount of 20 buy-ins at the poker website. Another method often used involves playing at the one level until you reach a set amount, for example 100 buy-ins, then move up to a higher stakes level, cash out all but 20 buy-ins and repeat. It is a clever technique for trying to move up in stakes. Alternatively the opposite is also true, if you are at a level and fall below 20 buy-ins, drop down to the lesser stakes and try and build your stack up again.
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