Bankroll Management Strategies

Bankroll Management

Risk Of Ruin	Building a bankroll	Playing Within your Means
Hourly Rate	Tracking Results

Poker is a game played with and for money. Money is not only the way of keeping score, it is also your ammunition at the table. The nice thing about poker though is that you can choose how many units your money represents. In a $1-$2 table the blinds will be $0.50-$1, so if you have $100 in your bankroll this will be 100 units. That same $100 bankroll would only be 10 units in a $10-$20 game so make sure you choose a game within your means. This principle is the essence of bankroll management.

Poker Strategy - Bankroll Management - Calculating Risk of Ruin

Risk of ruin is term used to refer to the possibility of going broke. The idea behind it is that even good odds may not be worth it if losing prevents you from taking advantage of a more favorable position later. Risk of ruin calculations apply very well to tournament situations and also for calculating how much money to bring to a cash game. One thing to stress is that Risk of Ruin is only a consideration when you are playing with a fixed, non replenish-able bankroll. This is always the case in tournaments or sit n go's but for most casual cash game players this is never really true. You can always make a new deposit at some point because you probably still have additional sources of income. For someone who supports themselves solely off of poker winnings risk of ruin is a very real and legitimate concern.
Risk of Ruin is not a fixed value, but really an estimate based upon your historical results and the cost of playing in a given game against your bankroll. Many players continually maintain a set RoR to by varying the stakes they play based on their bankroll. This essentially eliminates the chances of going broke because as their bankroll dwindles they will continually move downwards in stakes until their positive expectation begins to over come their downturn. Of course for risk of ruin to be meaningful you must be a profitable player, a player who averages a loss will eventually go broke regardless of stakes.

To calculate Risk of Ruin = e^{-2 x WR
x BR ÷ (SD x SD) where}e = Constant (2.718281828) and WR = Win Rate and SD = Standard Deviation and BR = your Bankroll

Here is a simple free risk of ruin calculator that can perform this operation for you. Remember though, the results will only be as accurate as the information you put into it, Garbage in, Garbage Out.

Poker Strategy - Bankroll Management - Risk of Ruin, Real world Application

So now you've figured out your win rate, your standard deviation and have come up with a bankroll requirement for each given level. Now what does this mean and how does risk of ruin work in real life? Well lets just say that you have established 5% as the RoR you are comfortable with and based on this and your win-rate and standard deviation you figure you will need about 500BB blinds at the level you are currently playing at. Perfect, but what if you now lose several hands? Or even have several losing sessions? At what point do you move down... This is important because as your bankroll dwindles the likelihood of your losing it all increases. By continually moving down stakes you will ensure your positive expectation eventually overcomes your losing streak. You should always have two number when playing, an upper limit where you will consider moving up the next level, and a lower limit where you will move down in limits to recoup and rebuild your bankroll. If 500 BB was the amount you needed to be comfortable at that level set a lower limit at 2-3 full buy-ins below this as time to move back down. By doing this your real world risk of ruin will always be zero, provided you are a winning player and not simply playing in games where you are outmatched.

Poker Strategy - Bankroll Management - Playing within your means

Poker can be a fun and rewarding hobby. If done right poker can even be a viable source of additional income. Even if you have a history of winning at poker though be sure not to over commit yourself. For individuals who wish to consider playing poker full time or professionally the best strategy is to make a modest initial investment and try and build a larger bankroll playing small stakes poker then as the bankroll increases gradually stepping up through the limits until such time as your profits in the game represent a comfortable living. The key though is to limit that initial investment. It is simply not reasonable to deposit thousands of dollars learning poker or seeing if you can make money. Perhaps the greatest virtue of online poker is the reduced rake and micro limit games available. These small stakes cash games and tournaments allow beginning players to cheaply hone skills and once proficient build up a large enough bankroll to begin playing for big money.

If you are a casual player or someone who only plays from time to time and you don't mind if poker costs you a little money as long as you have a good time, that's okay too. But you should still be practicing good money management. To avoid overspending on poker establish a deposit limit for yourself or poker allowance. Never exceed this limit, and when you have a really good day or week cash-out the profits. Keep a log or spreadsheet of your results. That way if your a big winner you'll know and you can take it up more seriously, and if your losing your money faster then you like you can step down limits. By playing at smaller limits you will be less vulnerable to overaggressive players bluffing you off pots and will have more chips to survive swings. Smaller tournaments also generally have weaker competition so by dropping down you may also win more games, which will definitely prolong your bankroll.

A good rule of thumb is if you for cash game limits is that if you are playing off a fixed bankroll never play more then 5% of your bankroll as the max table buy-in, if you are playing off a bankroll that can be reloaded frequently if necessary a reasonable level is 25% of your bankroll as the maximum table buy-in. Exact amounts vary widely depending on the individual player and of course are totally meaningless if long term you lose money as you will go broke no matter what, but these buy-ins should be sufficient to overcome standard variance for most players.

For players who simply don't have any money at all but love playing poker make sure to keep an eye out for good freerolls and no deposit poker bonuses. In general poker sites are very generous when acquiring new players and you often get small bankrolls to start out with for free and then build up a large enough account to cash-out and begin trying other sites until you find one you like.

Poker Strategy - Bankroll Management - Build your Poker Bankroll

Poker is a game played with money and for money. The game starts and ends at your wallet and dollars are basically the only meaningful way of keeping score. An important thing to realize is that poker is not a zero sum game, its actually a negative sum game. This is because the "house" or the poker room is taking a rake from every pot, or in tournaments a portion of the buy-in. This means if you win exactly your share of the pots in a cash game over time you will slowly lose money. The same applies to those sit and go tournaments, even though 1st place pays half of the prize pool winning 1 out 5 ten player games will not even let you break even. This means the players who are making money are beating you and everyone else at the table by enough to get you to pay their rake and still leave a little something extra! These rake fees are small in proportion to the size of the pots or the actual tournament buy-in but over time they definitely add up, this is why poker is now a multi-billion dollar industry and why the poker rooms are willing to offer massive deposit bonuses to attract new players. Because these bonuses are tied to a set number or player points the site is guaranteed to make money (they are paying you your bonus out of the rake fees you contribute to the site), but with a bonus you will be paying far less rake and this can make a HUGE difference in building up your initial poker bankroll. It is not uncommon to see bonuses between 100%-200% of your initial deposit. This is essentially free money as you earn it by playing poker which you were going to do anyway. Always try and get maximum value out of these bonuses by making larger initial deposit when you join and check poker forums frequently for poker reload bonuses. A reload bonus is when a poker room offers their existing players a deposit bonus to make a new deposit.

If you don't have the money to go out a make a large initial deposit to take advantage of these free offers that doesn't mean you are stuck playing poker for play money. There are many sites that will actually give you a small poker bankroll completely free. These initial bankroll are usually very small 5$-25$ but will give you an opportunity to try some real money play and a chance to build a more substantial bankroll with absolutely no risk. By running through several of these offers you should have some success at least once. Withdraw your winnings to a Neteller account or other online wallet and you are now ready to go shopping for a new poker home. If you fail the first few times don't worry We have several of the no deposit bonuses listed in our poker rooms section and will be continuing to add new offers as they become available.

Assuming you have already done all of the no deposit promos and spent your winnings (we're hoping) or just had a bad run you can still get yourself a poker bankroll with no investment by playing in freerolls. PokerForumSite generally doesn't advocate the freerolls hosted by most sites because they tend to teach you bad habits (people play very differently in freerolls then they do in other games) and also because in many cases the hourly rate offered by freerolls is impossibly low even if you are winning the events outright. That being said a freeroll is better then playing for play chips because at least there is some chance of winning money. Check back shortly as we are currently evaluating the expected value of the various regularly scheduled freerolls offered by the online poker rooms. We will update you shortly with the best freeroll tournaments to play to get the most value for your time.

Poker Strategy - Bankroll Management - Calculating & Forecasting your Hourly Rate in Poker

As more and more players beginning taking poker from a hobby or pastime to fulltime job or maybe just a source of additional income people are becoming more interested in trying to determine there hourly rate with the idea being that once they hit a certain level they can quit the day job and turn "pro". Well the first thing is calculating your existing hourly rate isn't so hard as long as you are keeping detailed notes, many programs like pokertracker will calculate your hourly win-rate for you along with all kinds of other stats, we also have free alternatives indexed for your reference in our poker tools section. Using the stats you have accumulated take your total winnings and divide by hours played. This can lead to some very deceptive estimates though. Lets say player A has played 215 hours of 1$-2$ no limit holdem and has lost 2000$ and has played 35 hours of 10$-20$ is up 9000$, he might take these numbers and do the math 9K won - 2K lost = 7K profit, 250 hours played = 36$ an hour! And this player would now be thinking "wow time to quit my job!". In reality this number is very deceptive. In the game where Player A has logged most of his play he is a substantial loser, down almost 1000 big blinds, in the larger game where he has only logged a few hours and he is up but only 450 big blinds, so assuming he was playing equal stakes throughout his play he would still be down 550 big blinds. If player A continues to play at the 10$-20$ level there is a very good chance his upswing will be erased over time and he will actually be losing money at a much faster rate then at the 1$-2$ level. In general it is a good idea to examine hourly rate separately for each limit or level you play, or if you must combine results at least first convert all figures to big blind amounts and calculate your win rate using this unit. By doing this you will get a much better picture of your actual average hourly earnings. These results will fluctuate wildly if you are using a small sample size so you really cant put too much faith into the number until you have logged thousands of playing hours.

Poker Strategy - Bankroll Management - Tracking your Poker Results

Accurately logging and tracking all of your poker play is an important step on the road to poker success. By keeping good records you should be able to better determine which games are the most profitable and where you are losing money. You will also be able to accurately gauge your level of play which is helpful when making the decision to change limits. Their are several options for logging your poker play, and something as simple as an excel spreadsheet is a good place to start. The one problem with something like a simple spreadsheet is it become cumbersome after time and doesn't give you a lot of the details you might get other solutions. A really great spreadsheet for tracking tournament results can be found free here. We are working on creating a variant for cash game players.
If you are a serious player you may want to consider going with an option like Poker Tracker of Poker Office. Both of these programs automatically track your results as well as a wide variety of game statistics. They will not only tell you what games you are winning with, but which individual hands and positions give you the most profit or cost you most chips.

Bankroll Management -

Risk Of Ruin

Playing Within your Means

Building a bankroll

Tracking Results

Hourly Rate