Why Bankroll Management is Important in Poker

Posted by icemonkey9 on Feb 25, 2010 in 100nl | 1 comment

I'm going to tell you the story of a groundhog.  You all know one and chances are, we've all been one at one point in our poker career whether you are a recreational player or seasoned professional.  A groundhog pops out of his hole and sees a shadow, then dives right back to where he came from.  The mere sight of potential trouble has him scurrying back to where he came from.  He barely ever stuck around to see if the shadow was even really there.

Sound familiar?  It should.  Whenever we move up in stakes, be it for Sit & Gos, Tournaments or Ring Games, we've all been the groundhog.  As many people believe, as soon as you move up in stakes, the doomswitch is activated and you will immediately go through a rough 10k-ish stretch of terrible hands.  It happens everytime and to seemingly every player.  If you don't believe me, ask your friends that play regularly, it's as sure as the sunrise is in the morning.

This is where the importance of bankroll management comes into play.  Two years ago when I was first climbing the micro-stakes into the small stakes games, I thought 30-35 buy-ins was plenty to "take a shot" at the next level.  The only problem is that it really didn't leave me much wriggle room for that inevitable run-bad.  Many players have never gotten over this hump and keep taking 3-5 buy-in shots at the next level, which in my mind is just always poised to fail.  I drop 3-5 buy-ins regularly in a session, but in the end, always come out a little bit ahead for my modest but consistent win-rate.

After reading Dusty Schmidt's book I realized the issue without him totally going into what was exactly affecting me.  He advocated that 100 buy-ins is the way to go, which I don't think works for me at all.  But the concept of having more than enough buy-ins to withstand a rough stretch was one I never ever really accounted for.

During my Phoenix-like rebuilding of my PokerStars bankroll, I moved from 25nl to 50nl and started a prop bet to get me to play a bunch of hands rather quickly.  Of course, I ran bad for a while then played through it and won at a decent enough rate.  But one thing I did was decide that 60 buy-ins was what it takes for me to move up.  There's plenty in there to withstand a terrible swing and recover without freaking out too bad.  I thought about the number for some time and 60 was a little more than I thought was really necessary for me.  That's when I knew I had the right number.

So, with 66 buy-ins I moved back to my old stomping grounds on PokerStars, playing 100nl Full Ring.  Some old names were still plodding through those stakes, playing their 10/8 nit game, 20-24 tabling and making 0.4BB/100.  Lots of fish are there too and the games really haven't changed much at all, thankfully.

Of course, within the first session, I ran three buy-ins below EV.  In fact, here's one of the first hands I played after moving up:

Poker Stars $0.50/$1 No Limit Hold'em - 9 players -
MP1: $101.90
MP2: $166.05
Hero (CO): $100.00
BTN: $100.00
SB: $49.00
BB: $194.90
UTG: $110.60
UTG+1: $111.25
UTG+2: $161.80
Pre Flop: ($1.50) Hero is CO with A A
2 folds, UTG+2 raises to $3, 1 fold, MP2 calls $3, Hero raises to $12, 3 folds, UTG+2 raises to $24, 1 fold, Hero raises to $60, UTG+2 raises to $96, Hero raises to $100 all in, UTG+2 calls $4
Flop: ($204.50) 8 3 Q (2 players - 1 is all in)
Turn: ($204.50) 9 (2 players - 1 is all in)
River: ($204.50) K (2 players - 1 is all in)
Final Pot: $204.50
Hero mucks A A
UTG+2 shows K K (three of a kind, Kings)
UTG+2 wins $201.50
(Rake: $3.00)

Wow right? He didn't show his cards right away but by the river, I figured my goose was cooked. Then there's a marginal cooler in this hand where I lose with a boat:

Poker Stars $0.50/$1 No Limit Hold'em - 8 players -
BB: $61.70
UTG: $103.00
UTG+1: $142.20
MP1: $120.65
MP2: $177.00
Hero (CO): $118.40
BTN: $102.50
SB: $100.00
Pre Flop: ($1.50) Hero is CO with J A

4 folds, Hero raises to $3.50, 2 folds, BB calls $2.50

Flop: ($7.50) K 5 J (2 players)
BB checks, Hero bets $5, BB raises to $10, Hero calls $5

Turn: ($27.50) K (2 players)
BB checks, Hero checks

River: ($27.50) J (2 players)
BB bets $16, Hero calls $16

Final Pot: $59.50
BB shows K A (a full house, Kings full of Jacks)
Hero mucks J A
BB wins $56.60
(Rake: $2.90)

Not terrible but hey, it always sucks to lose with a boat. Then there's this that always seems to be the kicker:

Poker Stars $0.50/$1 No Limit Hold'em - 6 players -
Hero (BB): $100.00
UTG: $108.55
MP: $100.00
CO: $108.75
BTN: $100.00
SB: $49.00

Pre Flop: ($1.50) Hero is BB with A A
5 folds (A walk)

Final Pot: $1.50
Hero mucks A A
Hero wins $1.00
(Rake: $0.50)

Funny. I snorted actually when this happened but didn't tilt like I usually do. I was rather proud of myself for just taking it in stride.  I didn't panic and I didn't freak out and yell and scream and just say "F THIS I ALWAYS RUN BAD!!!" after I lost a few other pots later in the session.  I just stuck with it, fought back, won some hands, and minimized the loss for the session and made sure I reached my target goal of hands played for the session.  "This is why I set aside 60 buy-ins," I would tell myself.  And thus, the groundhog became a Phoenix.