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Lessons in Online Bankroll Management
It seems like I often have to learn things the hard way, and poker has been no different for me. I’ve read everything in print, and I play, talk about and/or think about poker nearly every hour I’m awake. And finally, my game is starting to come together. However, that’s just the beginning…
The toughest struggle of all for me has been trying to get a handle on this ‘bankroll management’ concept. Even when I have a nice online win, I usually end up giving all the profits back shortly thereafter. And I’m not really much different in this area than most everyone else.
Just check the Sharkscope graph for a few people you know at www.sharkscope.com. The numbers reported on this site are dead on. I’ve personally played hundreds of online tournaments, and not even once have I ever seen my results missed or reported incorrectly there. Note: Sharkscope only reports the results of SNG’s (sit-n-go) tournaments. Scheduled tournaments and cash game results are not included in this database.
It won’t take very many searches to see that we all do it. We’ll have a nice cash, then lose it all. Eventually we’ll have another nice cash, then give it all back again. Enter Chris Ferguson…
In addition to being an excellent tournament poker player, Chris ‘Jesus’ Ferguson is considered by many to be one of the experts on bankroll management. His article on this topic can be found at http://www.chrisferguson.com/article-4.
Over the last year or so I’ve had many ups and downs online, and I’ve done a lot of experimentation. I started with the basic guidelines published by Chris Ferguson, and made a few adjustments to help keep me from getting into too much trouble. When my bankroll has grown, I’ve kept track of the conditions, and when I’ve lost tons, I’ve noted those scenarios as well.
As of today, here are the online bankroll management rules I am using for tournament play. Hopefully they'll help some of you, and keep you from having learn from trial and error.
1. Never play when tired, stressed, distracted or pre-occupied. I just don’t play as well when my mind isn’t focused on the task at hand. I’ve tried to convince myself otherwise dozens of times, and my spreadsheets prove that I was wrong.
2. Play no more than two tables at the same time. Same thing here. I thrive on ‘action’, and just love to play three or four tables simultaneously, but the truth is that I play my best when I focus on one or two games. It’s much easier to analyze betting patterns, observe opponents’ play styles, take notes, etc.
3. Don’t spend more than 5% of my online bankroll on any single table SNG. So if I have $100 or more in my Full Tilt account, I can enter one or two $5 single table SNG’s. Here’s a simple chart I use for this. Note that I’ve ‘rounded off’ the extra money that doesn’t go towards the prize pool. So a $10 (+$1) SNG is actually listed as $10. This turns the ‘5% rule’ into a ‘5.5% rule’, but that’s really negligible.
4. Don’t spend more than 2.5% of bankroll on any multi-table SNG or multi-table scheduled tournament (MTT). So if I have $200 or more, then I can enter one or two $5 MTT’s.
5. It’s OK to take a shot. But I need some structure here too - to keep me from burning through my entire bankroll in one or two big games with tempting million dollar prize pools. Let’s pretend that your bankroll is $220 and you want to play a $20 SNG. Sticking to the above 5% rule, you’d only be allowed to play in games up to $11. Occasionally we all want to test the waters in a bigger game. This allows us to pit our skills against better opponents and gives us an opportunity to make a big score. So what I’ve come up with is ‘averaging the buy-ins’. I think in this example it’s OK to enter two games at the same time – a $20 and a $2, for an average investment of $11.
6. If I don’t cash in two consecutive online single-table SNG’s, the current session should end immediately. Single-table nine-person SNG’s pay out three spots, which is 33% of the field. Even an ‘ completely average’ player should cash once two thirds of the time in two consecutive single-table SNG’s. I can’t tell you how many times I’ve lost three straight games in short order, only to continue playing and lose three more. If I’m not in a winning mode, I’ve learned that it’s time to stop right now – not after I’ve lost a half dozen more games trying to convince myself otherwise.
7. If I don’t cash in four consecutive online multi-table SNG’s or scheduled tournaments, the current session should end immediately. 18-player SNG’s pay out four spots, which is 22% of the field. 45-player SNG’s pay out six spots, which is 13% of the field. 90 and 180-player SNG’s, and scheduled tournaments with larger fields usually pay 10% of the players.
Give these online bankroll management rules a try and I promise that your online tournament ROI will increase. Or if you don’t believe me, you could end up with a Sharkscope graph that looks like this…
Bankroll,Bankroll,Bankroll....It really is all about managing your money! Good Advise for sure!
I do believe every now and again it is OK to jump up and take a risk. It really makes more sense in cash games rather than tournament play. As an example you could jump up to a game that is maybe 15 to 25% of your bankroll and give it a shot. However, you must realize what you are doing and the risk you are taking! I have done this in cash games, played tight, won a few hands and got out quickly. It makes a nice little jump in your profits. The down side is you can stay too long, loose a few hands and then try to catch up (ask me how I know this) and then you loose too much money!
The key is to realize and understand the bankroll risk up front. I wouldn't make a regular habit of it, but every now and again it can pay to take a little more risk.
I play Heads up SNGs as well. This is my br management, based off the half-kelly criterion.
I step up at 10 buy-ins and drop down at 7 buy-ins. To make this clear, If I have $100 I will move up to the 10s. If I lose 3 SNGs, giving me a balance of 70, I will drop down to the $5 SNGs.
Starting from a bank-roll of $20, you will take on a risk of ruin of 5%. In other words, if you are a winning player of 58% or better, you have little chance of going broke.
BR building is a function of your risk tolerability and desire to move up to meaningful stakes. If you have a 20% return on investment at the 5s, you are earning $1 per tournament. If you play 30 tourneys a day, you are not making very much money.
I believe it is better to build money until you make a comfortable level, and then become more conservative. Comfortable for me is 33 SNGs.
I do believe that 25% of your roll is way to much to play comfortably. Kelly Criterion suggests a maximum of 15% of your roll. Psychologically, this can be too hard for many players.
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