Your Psychological Bankroll and Managing Risk
You’ll hear the term bankroll thrown around in poker circles and it usually pertains to the amount of money that you have available strictly for poker playing. This is what the term is meant to describe in a perfect world. However, a majority of poker players do not have a “bankroll” per se. They have some extra cash that they like to gamble with and poker is the gambling activity that is en vogue right now. This is a great thing if you are a poker player who takes the game seriously and wins. This article is not about strategy, odds, or whether to value bet the river. Its about your lifeline, your bankroll. In particular your psychological bankroll. Allow me to explain.
The poker bankroll to a serious player is everything. Its what you should be most attentive to when deciding what limits to sit in, how many tables to play, and what type of game whether it be shorthanded or full ring. It is like your financial report to your business on a daily basis and it should be treated as importantly. In addition to the monetary bankroll, your psychological bankroll must be determined and used as appropriately.
The number that you may hear from a lot of poker books regarding a playing bankroll that have been written is around 300 big bets for limit games. Now, for live play 5 years ago that may have been the case. With the booming expansion of Internet play, that number seems to be outdated. The playing bankroll should be in tune with your psychological bankroll and not looked at as a fixed monetary number.
Your psychological bankroll in essence is the amount of money you need to feel comfortable about riding out swings within the game of poker. I use it in terms of % of monetary bankroll and in terms of Big Bets in limit and max buy ins in No Limit Hold ‘em. Some players have a higher stress tolerance for losses and some have very little. The higher your stress tolerance is the fewer buy ins or Big Bets you need for a particular game.
An example of this would be a person who doesn’t use their bankroll for living expenses and wouldn’t have a problem losing a large chunk of bankroll in one session would be adequate with 10 buy ins for No limit Hold ‘em or 300 Big Bets for limit. On a bad day they may lose around a third of their entire bankroll.
The other extreme is the quintessential poker pro who makes his living playing the game. The psychological bankroll required for this particular player may very well be 25 buy ins for no limit or 1000 Big Bets and higher in limit if they need to withdrawal their monthly “nut” for their living expenses. They need to have some cushion built into their bankroll to ride out some swings and not affect their play. Some pro’s risk tolerance is for even higher amounts of Big bet ratios to virtually eliminate their risk of ruin. That way on a very bad day they may lose 10% of their bankroll or less.
The idea behind bankroll and managing risk is that the fewer Big bets (or Big blinds for No limit) is that the greater chance you have of going broke. It doesn’t matter how good of a player you are, huge downswings are inevitable and by not managing that risk you can wind up sitting on the rail waiting to scrape up your next buy in. I don’t want that to happen to you.
For a high risk, take a shot player, he or she may sit down with some disposable income and have 50 Big bets and decides to put it all in play. They may win or they may lose and if they lose will just have to either wait for more money to play with to refinance their obviously inadequate poker bankroll. These players are the type that usually either lose quickly or win and move up to a higher limit quickly and run high risk plays with their money.
You need to figure out as a player what your risk tolerance is and adjust your bankroll accordingly. If you are a true gambler and want to either win big or lose quickly then put it all in play and take a shot. If you are more conservative, then adjust that Big bet number higher according to your risk tolerance. I personally like to keep 500 Big bets for limit games and 20 buy-ins for no limit games handy to keep my risk where I feel comfortable. I can comfortable drop in a downswing 200-300 Big bets and really not have to start to worry. I also do not play poker for my sole source of income either. If I were, I’d probably prefer 1000-1500 Big bets and 50 buy-ins for no limit games. In terms of money that would be to play the 2-4 No limit games full time for income I would want 20,000 dollars if it were my sole source of income. That gives you enough money to ride out any downswings and allows you to keep your head focused that you are not “running short”.
Figure out your own risk tolerance and your psychological bankroll. Keep it in your head at all times and use it as an important guide to your poker career. You’ll be glad you did. Best of luck and see you at the tables.
Cheers,
Bunky
