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Bankroll management is one of the main elements of success in poker

@Top1Percent

Bankroll in poker: what it is and how to manage it

The most important thing in poker? Obviously, it is the bankroll, because it is the only resource, the only “scorekeeper,” but most importantly, the only element that can prevent going broke and sustain the player’s growth.

What are we talking about and how is it so important? More importantly, how to avoid mistakes in such a sensitive context? The answers are right below, just keep reading.

What is bankroll

The bankroll is the total amount of money allocated to poker; careful management of one’s bankroll allows one to minimize the risk of losing.
It should by no means be confused with savings, as these are dedicated to a broader spectrum of needs, but it should be considered in all respects an investment: it is the capital we allocate to poker and with which – one hopes! – Will grow.
One of the wisest pieces of advice in poker (and in gaming in general) is to keep personal finances separate from those used to play, and it is good to consider this money as “already lost,” lest it affect our emotionality.
In this way, we can better manage our capital because of two main advantages:
– Let’s not risk getting into a circle of “loading money and losing it and then loading it again”
We can untie the value of money more from our emotionality, thus being able to make more analytical and less impulsive choices
It is essential for a poker player to learn how to climb the levels without experiencing any kind of psychological pressure, and careful bankroll management serves exactly that purpose.
How is it done?

How to manage the bankroll

Let’s make an essential note right away: this article is intended primarily for inexperienced players looking for information, so what follows is an extremely simplified guide of how to manage the bankroll.
In reality, bankroll management follows strict mathematical analyses that depend on numerous factors such as expected winrate, standard deviation, “risk of ruin,” and others. If you are interested in learning more, at the end of the article in the Standard Deviation section we explore this concept a bit more.

But now let us understand a basic foundation of bankroll management for beginners.
First, a poker player must think of his bankroll in terms of buy-in or big blind and not in terms of money. This is because, at whatever level he decides to play, what he is going to invest will be such a fraction of what he has available that it will minimally affect the total.
For example, if we play NL5 cash game, then €200 will be 40 buy-ins; if we play €2 MTTs, it will be 100 tournaments.
Why do you play “so little” in relation to the total bankroll? The answer is variance. Even the best players in the world can have long periods of losses, and good bankroll management serves to cushion these periods, with the goal of chasing the famous “long term” and proving themselves as winning players.
Basically, you start with a certain amount of capital: when you fall below a certain threshold and your bankroll gets too tight, you respond by moving down (level down), and conversely by winning and finding yourself with a sufficiently high bankroll, you can move up to higher tables (level up).
If we do not consider the mathematical analysis we were talking about, it is possible to make more or less personal choices about the bankroll needed, when to go down and when to go up. If you prefer to take a more scientific approach, the good news is. Top1percent can provide you with the bankroll and instructions on how to manage it: you won’t have to worry about anything but playing your best!

The free bankroll offered by Top1% is an excellent opportunity

You can take your pick, but watch out for swings!

There are no hard rules about how many buy-ins you should have available, as long as they are not really too few and you are strict with yourself about level ups and level downs. Let’s take an example to better understand:

We decide to load €300 to play the NL10, 30 stack. Below 20 stacks we will level down, and when we reach 25 stacks in the next level (in this case NL25, €625) we can level up.

This is somewhat more aggressive management, which means it will be subject to more frequent level changes. In fact, it is anything but difficult to have a negative swing of 10 stacks, and when that happens we will have to go back to NL5, win 10 stacks and go back to NL10. And once we land at NL25, if we lose 5 stacks we have to go back to NL10.

On the other hand, if we wanted to always play with at least 50 stacks of bankroll, with €300 we would have to play NL5, play until we reach €500 and at that point level up to NL10, where we would have to play until we reach €1,250 to reach NL25.

This will make us less susceptible to swings, but the climbs will be longer and take longer. In practice, deciding how to manage the bankroll is a balancing act between sudden level ups and speed ups.
But how to know when we have gone too far? In the low case, so few stacks to bankroll, it is dependent on the probability and intensity of swing (see last paragraph), while in the case of having too many stacks it is a bit more subjective: do we expect to level up in 80,000 hands with our winrate? That may be fine, but if we are already certain to beat the level they may be superfluous.
In fact, there is a tendency to prefer more aggressive management at low levels, and then proceed more cautiously as you go up.
If you don’t want any of this to worry you, with Top1percent stak-coaching your bankroll management will be all in the hands of your coaches, and level changes will not be dependent on your results at the tables and related swings.

MTT

Tournament mode poker is one of the most “variance” and quieter bankroll management is usually preferred.
At one time 100 buy-ins were recommended, but over time, and particularly at microlimits, it can be reduced, although it would be best not to go below 50 buy-ins.
Consider that MTT players usually play different buy-in tournaments, trying to stay around a certain ABI (Average buy-in) so this needs to be calibrated as well.

Cash Game

50 stacks is enough in cash game usually, and you can be more “variance” and aggressive or more steady and strategic.
The ideal choice also depends on the player’s ability in a given level. If you have a good winrate on a good sample of hands at low stakes, you can afford even 25-30 stack bankroll, but going up it is usually better to be more cautious, even 70-80 buy-in.

Spin & Go

Spin & Go and all other random-premium sit-ins have in common high variance and high rake in most cases (minimum multiplier).
Consequently, a quieter and more moderate bankroll management, 150-200 buy-in, is preferable. Again, there are those who promote more dynamic management to take advantage of positive streaks, but no one considers less than 75 buy-ins for level down.

The benefits of bankroll management

Despite all these explanations of the bankroll and how it works, we have not yet addressed the math to show how this system can decrease the chance of losing everything and facilitate steady growth over the long term.
Let’s take the example from earlier, a player with €300 playing NL10. We think it is, unfortunately, losing with a winrate of -5bb/100. Basically every 100 hands he loses 5 big blinds.
Without bankroll management, he would lose everything in an average of 60,000 hands. But if he went down a level every time he touched 20 stacks: he would play 20,000 hands at NL10, get to €200 and play another 40,000 hands to get to €100. At this point in NL2 he would have to play an additional 100,000 hands before he really lost it all.
Even with such aggressive management he could play almost three times as many hands, and we are not even taking into consideration that A) by going down a level his winrate might increase, B) by playing longer he can learn more and improve.
Finally, let us think of a third type of player, also a winner, who nevertheless loads €50 from time to time to play four tables at NL10.
Let’s say this player wins 5bb/100. What are your chances of climbing the levels?
The answer lies in the standard deviation, which also donates a more scientific approach to roll management.

Standard Deviation

The standard deviation is a statistical dispersion index: it indicates the variability of a data (in our case the expected value). In simple terms, this value lets us know, based on the sample chosen, how much variance affects (either positively or negatively) the observed or estimated winrate.
Without tracking software, it is complicated to find out how much it amounts to, but empirically, most players fall in the range of 75 to 90, depending on playing style and limit played.
Having found that data on our Holdem Manager or Poker Tracker, we can visit the site pokerdope.com where we can enter our winrate, standard deviation and a sample of hands to simulate. We will be returned with a variety of graphs of possible outcomes at the tables, and some interesting data.
We will use 80 of STD DEV. as a reference value in later examples, for convenience.
By expected value, calculated in big blinds per 100 hands (bb/100), we mean the estimate of how we beat the chosen level. It should be clear that a player who is a loser or only capable of making even will not be able to approach the level, since he would need an infinite number of stacks for his risk of ruin to be less than 5 percent.

 

If Ev ≤ 0.1 Banroll needed to reduce risk below 5% of going broke Infiniti BB

A conservative approach, starting from scratch or having beaten the previous level, is to estimate a very low winrate. Any rakeback should be considered in the final estimate.

Let us take as an example a player who does not yet consider himself a winner at the tables, estimating an expected -2 bb/100, to which, however, he adds 3 bb/100 of rakeback (i.e., a rakeback of about 40 percent at the microlimits), bringing his total expected value to 1 bb/100. Pokerdope returns us the following graph with its values:

The standard deviation in bankroll management
EXPECTED VALUE. 1.00 BB/100
STANDARD DEVIATION 80 BB/100
NUMBER OF HANDS. 100000
EXPECTED WINNING. 1000 BB
70% APPROXIMATION INTERVAL (Actual results on the number of hands simulated will fall within this range 70% of the time) [-1530 BB, 3530 BB] ♠ [-1.53 BB/100, 3.53 BB/100]
95% APPROXIMATION INTERVAL (As above, with 95% certainty, 19 times out of 20 the actual winnings will fall within this range) [-4060 BB, 6060 BB] ♠ [-4.06 BB/100, 6.06 BB/100]
PROBABILITY OF BEING AT A LOSS AFTER 100000 HANDS 34.6316%
PROBABILITY OF OBTAINING A WINRATE EQUAL TO OR EXCEEDING THE OBSERVED WINRATE (1 BB/100) out of 100000 WITH REAL WINRATE OF 1 BB/100 50%
PROBABILITY OF OBTAINING A WINRATE EQUAL TO OR LESS THAN THE OBSERVED WINRATE (1 BB/100) out of 100000 WITH REAL WINRATE OF 1 BB/100 50%
BANROLL NEEDED TO REDUCE THE RISK OF LOSING EVERYTHING BELOW 5% 9586 BB

As the last item shows, 95.86 stacks are needed for the risk of ruin to be below 5 percent. Despite this, the chance of being a loser after 100k hands is still 34.6%.
In addition to all this, it should be added that, should we want to consider poker as a source of income, from any winnings that go to increase the bankroll we have to subtract the profit that we decide a priori to allocate differently (e.g. in savings, daily expenses, etc.).
We can use the same tool with regard to MTTs.
Consider that we want to play €10 MTTs estimating a 10% ROI (return on investment) and want to know how much bankroll we need to minimize the risk of ruin after 1k tournaments:

RISK OF LOSING THE WHOLE BANKROLL BANKROLL NEEDED
50% 1755
15% 4344
1% 9087
PROBABILITY OF LOSS AFTER 1000 TOURNAMENTS 18,20%

Not only will we be losers 18% of the time anyway, but to reduce the risk of ruin to 5% we need a bankroll of €6,411, or 641 times the cost of the tournament.
Obviously with higher win rates, the bankroll needed will be lower, but never really low-there will always be a margin to resist swings.
In short, for those who load sporadically and play everything in one session, the chances of losing and having to load again are really high. And then-when will it go to the next level? When will he be able to withdraw?
The answer to everything is in bankroll management, and if you’re not ready or don’t feel like thinking about it yourself…contact Top1percent and find out what we have in store!

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