In poker, the battle begins even before sitting at the tables. Players prepare, analyze their game, discuss with others, read poker books, watch poker videos, participate in learning programs, and improve their skills using methods that suit them. And then the action moves to the “real battlefield,” at the poker table in a tournament or a cash game. What role does money management play here? Let's say, the better you manage your money, the more opportunities you have to show your superiority over your opponent. You can be a very good player and get KK on the first hand, go all-in and lose to your opponent's AA, or even vice versa, get AA and lose to a confident opponent's JTs who went all-in preflop. If you don't know how to manage your money, your “professional” career might end right there.
I can confidently say that a good understanding of money management is essential and one of the most important skills in poker.
What is bankroll management?
Poker is a high-variance game, meaning you can play well, get good cards, and still lose. You might just be “unlucky.” Therefore, in poker, all results are evaluated over the long term, because short-term results are greatly influenced by luck. So, in simple terms, your bankroll is all the money you have allocated for playing, so you can survive short-term downswings and bad luck and be free from random luck.
All winning players face downswings, sometimes very significant ones, so poor bankroll management can mean you simply won't have enough money to recover from a downswing. It's important to understand that when talking about good money management, it is only relevant to winning players, because no matter how good your money management is, if you are a losing player, you will still lose it all; it's just a matter of time.
Bankroll size
The size of your bankroll is a very subtle and even “intimate” matter; what might seem sufficient to one person might be scary to another. First, you need to see if you can beat that level of play. If the answer is no, then even the most conservative management won't help; you need to improve your skills. You need to know the game's variance and your emotional reaction to it. Let's say the game's variance is in the range of 10-30 buy-ins, so technically 50 buy-ins would be more than enough, but can you play good poker being down 30 buy-ins? And let's say you have 100 buy-ins; in this case, a 30 buy-in downswing doesn't seem so scary. You need to know your game's average and maximum variance.
All numbers and advice are more of a recommendation; they are just guidelines, and you need to set the exact amounts and precise management yourself. You need to feel when you are comfortable, when you start to get scared, and when the importance of money affects your game. You need to set your own management rules: when to move up in levels, how to withdraw money, and how much to allocate for improvement.
However, we can summarize the factors that determine your bankroll size: the type of poker, the type of poker game, the playing style of your opponents, the number of opponents, your skills, your ROI/winrate, your goals in poker, acceptable risk, emotional stability, psychological preparation, etc.
Recommendations
What should you consider when setting your money management rules? I recommend writing down your money management rules; this way, you commit yourself more to following them, you can even sign a contract with yourself ;). You need to think about and pre-determine what games you will play, what levels, when you will move up in levels, when you will move down, what you will do if things start going very badly, and what you will do if things start going very well [this is a very serious question; there are players for whom big wins are the beginning of the end of their careers]. You need to decide when and how you will withdraw money, and how much money you will allocate for improvement.
Main mistakes
- Often, players, especially new ones, find money management rules too conservative. New players find it hard to understand why a 100 or even 200 buy-in management plan is necessary.
- Often, players overestimate their abilities; this is one of the classic human weaknesses, overestimating oneself (ego at work).
- The allure of higher limits. Many players cannot resist the temptation to try themselves at higher limits, which often undermines good money management.
Link to a good bankroll management chart (in English)
