Expert Bankroll Management
br /> If you feel you are in this category, then one of two things are in order. If you got here because an impartial analysis of your skills by players you trust have placed you here, then I give you a heartfelt prop on your superior ability. If you got here because you and you alone believe you are the best player ever and nothing anyone else says is going to change your mind, then you get the self-deluded award. Please leave your screen name on the message board so we can all “congratulate” you :o)
True experts make up the most elite class of poker player. They achieve this status by playing better than 98% of all the other players. While their play is in the rarified air at the very top, results often vary, so let’s start at the bottom. I would strongly recommend that all players also read case #3 as that is where I deal with many of the “big picture” issues that most experts face. And please read the paragraph at the very end of this article as it also deals with all categories.

1. A losing expert player who plays to make money – Few things are more frustrating than knowing you play better than almost all other players, yet being a consistent loser over time. The first thing you need to do is to double check your math. If you have done this and you are a consistent loser over time, then the next thing you need to do is find an objective outsider or two to give their opinion of your play. Many top online trainers will perform this service for you. Usually when I teach, I am the one deciding what action we will take in the game. To really evaluate a player I will let them dictate the action and explain their reasoning while I sit back, observe, and decide if they are making sound plays.

If you truly belong in this category and you are just on an extended bad run, then one thing you should try is dropping down a bit in level. Play for a while at only 1% or even 1.25% of your bankroll. This has several benefits. First of all you may find that the games at the lower level are easier and you will start winning again. This will, in turn, bring up your confidence and make you play your “A” game again if you have been slacking a bit. Second of all, this will ease the pressure that an extended bad run can create on your bankroll. Even Doyle Brunson admitted to going almost a full year without winning, so you are in good company.
One more thing you should consider is serious training. It is no shame to be an expert player and still seek to improve yourself. I often say that after 26 years into the game, the biggest thing experience has taught me is that there is so much more to learn. I watch Todd’s and Ryan’s videos here at rpt all the time and each time I see one I take away something new to add to my game.

1. A losing expert who plays to have fun – As above the first thing you need to do is to double check your facts and make sure you belong in this category. If you check carefully and still find this is where you fit in, then your case is simple from a math perspective, but may be complex psychologically.

First the math. If you are achieving your goal of having fun when you play and you truly do not need the money in your bankroll for anything else, then you really don’t have much of a problem. You can play at 2% or drop down a little or even go all the way down to 1% as long as you still enjoy playing at the lower level. I would suggest you find the lowest level you can enjoyably play and stick with that one. Since you are not in the game to make money anyway, as long as the lower level is exciting, you are good.
The other factors involved here are more complex. I know an expert player who has been playing poker for more than 40 years. He used to win a lot of money at the game and wisely invested most of it in real estate so he is now comfortably set for the rest of this life barring any major disaster. About five years ago he started to get bored with the game. He began experimenting with complicated and unusual plays. While it’s true that poker is such a deep game that there are times when these complicated plays are correct, mostly the experts know that you should not get tricky just for the sake of being tricky.
If you find yourself making way too many tricky plays, perhaps a full overhaul of your game is in order. Find a good teacher and have them evaluate not just your level of play, but the appropriateness of your play. Do you make moves to win pots, or just to demonstrate your ability to make moves? This type of scrutiny is a good thing for all players once in a while, from experts to donks. After all, it’s not just the Nova hatchback that needs a tune up once in a while, but even the Ferrari needs to get into the shop now and then.

1. A break-even expert who plays to make money – So it hasn’t been the kind of year that you would have liked. All your solid play has left you pretty much right back where you started. The big temptation here is to scrap everything and start over from scratch. I have known very solid players who begin to question so much that they lose all that’s good with their game. Let’s not get that extreme, but some scrutiny is in order.

A good place to start is with your game. Before you make any drastic changes, find somebody impartial to evaluate your play. One small leak can eventually sink the tightest ship and maybe that’s all you need to fix. When I first made the transition from limit holdem to nlhe, I unknowingly carried with me the limit notion that drawing to the nut flush was always a good play. It was such a natural thing for me to do that I never noticed I was doing it. Fortunately, an old mentor of mine pointed it out to me and explained why it was a leak in my game. My bottom line showed immediate improvement.
As for the money, well, from this category up we start to deal with the real meat of the risk vs reward issue for the expert player. Let’s start with the risk. As an expert player, you naturally have a lower expected variance than most other players. The problem is that even with lower variance, it is still possible to have an extended bad run and go bust. Some risk-taking poker authors have advocated experts play as high as 5% of their bankroll. Let’s set this number aside as our maximum. My suggested level of play for an average player was 2%, so let’s set this as our minimum.
We now have a working range from 2% to 5%. From a risk side, these numbers translate to this. At 2% you can go 50 losing sessions before you go broke and at 5%, you can go 20 sessions. One of the key goals of bankroll management in poker is to prevent yourself from going broke. Keep that goal in mind as we move to the reward discussion.
A good maxim is that you should always give yourself the best chance to win the most money you can. Following that maxim leads us to conclude that playing higher limits would give you more chance to win more money so you should play the highest limit you can. Even from a strict reward perspective, this is flawed logic. Poker is not about winning the most you can IN ONE SESSION. Poker is about winning consistently over time.
A classic reward question is this: Is it better to win $2,000 in one session or to win $200 in each of ten sessions? My answer is that winning ten sessions of $200 is better. I base my answer on this follow up question for the 2k winner. What happened in your next nine sessions?
The beauty of following a plan based on a percentage of your bankroll is that as your roll grows, you naturally move up in level. The danger is in moving up too fast and finding yourself playing a level you cannot consistently beat.
I am a cautious fellow and it has gotten me far in poker and in life. Striking a good balance between risk and reward often involves some sacrifice to both objectives, so I suggest a middle ground of 3.5%. If you find you can beat the games at this level easily, move up a bit, but don’t be ashamed to move back down if the higher game is too rough. After all, we are playing to make money, not to brag.

1. A break-even expert who plays for fun – As with all cases, start by asking yourself if you are achieving your goal. In this case, are you enjoying your game? If the answer is yes, then leave it alone. You may even think about playing for less if you think you will still enjoy it as much. I often enjoy winning a $1 tourney as much as a higher buy-in tourney.

If you are not having fun, and to a lesser extent even if you are, you should consider some coaching. Obviously you already have, since you are reading this at Realpokertraining.com :o) Continued education can only improve you and your game. It’s human nature to enjoy the things we are good at more than the things we are not good at.
Either way, this category lends itself well to smallish play. If you play as low as 2%, you may find your skill advantage bringing up your bottom line as an added bonus.

1. A winning expert who plays to make money – As my old jewish grandmother used to say, “So what could be bad?” Translation – ummm, woohoo!?

You are winning good money with your expert play, so I guess the only question left to answer is, “Why mess with a good thing?” The simple answer is don’t. If you have found a level that you can consistently beat and you have been very successful over a fairly long term with it, great.
If you feel you can win at an even higher level and are not sure about how to move up, then read on. First thing to do after a nice run over a long stretch is to start setting aside a cushion of money separate from your bankroll. I suggest anywhere from 10% to 50% of your new bigger bankroll. You can invest this money elsewhere or just leave it in the bank, but believe me you will appreciate having it. Also taking a few bucks and spending it as a reward for all your hard work is never a bad thing.
Unless, like Todd, you bought yourself a Ferrari as a reward, you should still have a larger bankroll to manage now. Regardless of past results, I still would keep 5% as a ceiling. Playing above that level is way too reckless and anyone can have a bad run. Since you probably have a nice size bankroll now, perhaps you can even play a lot less than that and still make a nice income. The worst thing you can do now is get greedy.
If you are going to move up, move slowly and evaluate your results constantly. Some of the best players you’ve never heard of make a lot of money playing middle limit poker and are smart enough to keep it that way.

1. A winning expert player who plays for fun – Again as in case #5, not a bad situation to be in. I hope that you are having fun winning all that money :o)

Two things to keep in mind here. First, if you think you would have as much fun playing small, by all means do so. And second, as above, unless you are wealthy, start making a cushion for yourself.
If, for some reason, you are not having fun playing, maybe the level of money involved is not the issue. Try learning a new form of poker. Play tournaments instead of cash games, or try a game like Omaha or Stud if you are normally a Holdem player. See if the change brings more enjoyment to your game.
Keep this in mind

Please keep in mind that these guidelines are for cash players. Sng players should play in the 2% to 3.5% range as their variance will be higher. Mtt players should keep it as low as possible. 1% is still the optimal range for mtt play and even with a sick itm %, going above 2% is a recipe for disaster. Let your play win you into the bigger mtts by playing more sats.

Introduction to Money Management

Part 1

It never fails. Inevitably, the first day of my lifeskills class on Money Management at Brookdale Community College somebody will ask me - What is Money Management? Instead of asking them why they signed up for a course about something unknown to them, I usually answer the question this way. In the broadest possible sense, money management is setting income against outflow and creating a budget. In some way we all deal with money. Some comes in (income) and some gets spent (outflow) and how we deal with it is money management.

So why is dealing with something as seemingly simple as this, hard enough many people who think they need it don’t even know what it is, and most people just cannot do it? The key word in that question is people. In a factory, if Robot A costs you $500 a day to operate and makes enough poker chips each day for you to sell for $450, then Robot A is losing you $50 a day and once you realize this, Robot A is history. In life, if your friend, Smilin Bob borrows $50 a day from you and never pays you back, well that’s a whole different story. First you tell yourself that one day he will pay you back. Next you remember that he is the guy who turned you on to Enzyte and natural male enhancement. For one reason or another people are very good at ignoring the truth when it suits them.

As an example, how many of us feel that we are good drivers? I raised my hand, did you? Well, if we are all good drivers then please explain to me just who are the idiots we all yell at in those other cars when they cut us off going 90 in a 45 zone while doing their makeup in the mirror and talking on their cell phones?
The truth is that we all delude ourselves. The golfer who puts down a 4 on his scorecard because the one that went into the water “didn’t count”. The dieter who eats the off limits brownie because she “was good all day”. The poker player who spends $500 on rebuys in a $50 tourney, squeaks into the money to win $200 and tells his friends only that he won $200. Try, for one minute to think of a time when you stretched the truth because it made you feel good. Way too easy, wasn’t it?

Now don’t get all mad at me. I’m not trying to tell you that making yourself feel good is a bad thing. Heck, I’m sitting here eating a cheesesteak and drinking a beer while I’m writing this, even though the doctor tells me I need to lose weight. What I am trying to tell you is this. If you want to be a long term winner as a poker player, you have to start by at least being honest with yourself. Lie to your friends, lie to your wife, lie to the dog if it makes you feel better, but be honest with yourself.

Let’s start with some honest record keeping – not the kind where a $500 buy-in and a $200 cash = a $200 win. For the purpose of keeping honest records, only the bottom line matters. Just take the amount you took out of a poker session and subtract the amount you put into that same poker session to get your bottom line for that session. So a $200 cash minus a $500 buy-in = a $300 loss for that session. Now do this separately for every poker session you play from now on and keep all your bottom lines either on paper or in a spreadsheet. Either weekly or monthly take a minute to get a running total.

One thing you should keep in mind as you do this is that this is not an indictment of your poker playing ability, this is only keeping track of your money. Just as 1, 50, or even 100 winning sessions does not make you a long term winner, the same number of losing sessions does not make you a long term loser. In math, the “long term” is a much bigger number than you can imagine. Poker skills are about making the correct decisions based on all your available information every time you act. Money management is about keeping track of your money.

We are now up to defining money management specifically for a poker player. To put this in layman’s terms, the ups and downs that are a part of poker for everyone, NO MATTER HOW GOOD THEY ARE, force us to follow certain guidelines so we don’t go broke easily. Even if you follow these guidelines to the letter it is still possible to go broke, but you will have much less chance of it. So money management for a poker player is being able to follow a set of guidelines when deciding how much money you can invest in poker with the least possible chance of going bust.

These guidelines differ depending on a few factors. Things like your level of poker expertise, your bankroll level, your disposable income, and even the reason why you play poker all affect what levels you should be playing. So quickly, while you are still being honest with yourself, take a moment to answer a few questions.

1) If you have been keeping honest financial records for over a year, is your yearly bottom line positive or negative? Then take this a step further and do a little math. Add up all your buy-ins and then divide the total by how many sessions you’ve played. For example, if my total buy-ins over 100 sessions is $25,000, then I divide $25,000 by 100 sessions to get an average buy-in of $250.
If your yearly bottom line is less than ten times your average buy-in, either positive or negative, then for our purposes you are a break-even player. In our example with an average buy-in of $250 this means you ended your year anywhere from $2500 down to $2500 ahead.
If your yearly bottom line is closer to fifty times your average buy in than it is to ten times, then you are a winning or losing player. In our example with an average buy-in of $250, this means you ended your year closer to $12,500 up or down than you were to $2500 up or down.
If your yearly bottom line exceeds fifty times your average buy in by a lot, I sincerely hope that it is positive or you are wealthy. But for now, go ahead and place yourself as a winning or losing player.

2) Now, try to objectively judge your ability. Remember doing this will not brand the word “Donk” on your forehead. Nobody will ever know what is in your mind, so please try to be honest. Then, after you have labeled yourself as either Expert, Average, or Donk, get a few second opinions. Ask a few of your fellow players what they think of your ability. Try not to ask after you just sucked out with a 26 off against rockets, but do try to form a fairly objective opinion of your current ability.

3) Go over your finances carefully. Do you have money in savings or are you in debt? Are all your credit cards maxed out or all paid in full? After you pay all your monthly bills, do you have money left over or are you constantly wondering how you are going to make ends meet? Do you have a steady income from sources outside of poker or are you otherwise unemployed?
The truth is, most of us fall somewhere between these extremes. If, after going over your finances, you find that you can comfortably say you have some money left over for the year, call that your bankroll. If you have been honest in going over your finances, your bankroll will be the amount of money you can play with for the year.
Note – If you are a professional who plays for a living with no other source of income then that is a special case and, unless you are starting off in debt, you should skip this step.

4) Now complete this line “I play poker because …” If your answer is “to make money”, then your total bottom line had better come out positive. If your answer is “to have some fun” then you should make sure that you are having fun playing. After all, setting goals and then achieving them is one of the things that makes life rewarding. If you are not achieving your goal, then start working on it. Read some of the excellent poker literature, join an online training site, or find a mentor or private teacher to help you work on your game.
You should now have a basic profile of yourself complete. It might say be something like, average break-even player who plays for fun with a $5,000 bankroll, or losing donk who is desperately trying to win enough money to get himself out of debt (hands off – that profile’s mine!). The next step is to read all the specific suggestions in the upcoming articles, but pay the most attention to those for your profile.