Bankroll Management (Long)

[asianpride54]

I have a good story about bankroll management well I am glad to say I went from $0 to $200 dollars from bankroll management. Well my guidelines were to play head up only in tables who has only one person. I knew that if i were to play against one person it would give me a greater chance of building my bankroll. I first went into a table with a guy that had $10. He thought he could push me around by going all in. Boy was he surprized when I double up from him two times. I trapped him with trip K's one hand vs two pair. The second time it was full house vs nothing. After that table i had 13 dollars in total. Then that was when the fun began. although I didn't have strict guidelines like Chris Jesus Ferguson I played tight. My rules were if i won 1 dollar or more on a table i take the money and move to another table i kept doing this until i got to 37 dollars. Then i sufered my first major loss i lost 21 dollars on one hand my full house was beaten by a bigger full house. I had a new rule that I had which made me reckless but i was successfull at the same time. I kept using the mind set of me not caring of going bankrupt. I never thought twice about something. Me not caring about losing my money help me to where i am now.

 

[Jagsti]

Not sure where you got your formula (maybe a 'limit' poker reference? although 300BB/600bb is usually the standard given mathmatically), but I can guarantee that your risk of ruin having only 11 buy-ins is WAY higher than 2%...

AG This formula has been widely used amongst poker info sites, however, your correct that this is to be used for LHE. My mistake is transposing NL figs for it, I apologise for that. Surprised it wasn't picked up earlier .

As I said earlier these figures that are bandied around are for guidance only, and to be comfortable with a BRM strategy, you really have to work it our for yourself. For e.g. I'm sort of a conservative person, I like to have a big safety net. I don't handle variance that well and my roll means a lot to me. I therefore have a 40-50 buy in BR. I progress up the limits at a slower rate because of this (and b/c my winrate is not as great as some other players). ChrisTC, afaik, has a more aggressive BRM as has been anecdoted in his 'Lets build a BR' thread. He was playing with 5-10 buy ins strategy, hence he has way more variance, moves up limit a lot quicker (and down ), but it what's he used to and happy with.

So for LHE the above formula stands:

eg you playing $1/$2 lhe and your winrate is 2PTBB/100, you accept a RoR of 5%, and you have a SD of 20BB/100.

Bankroll = -(SD^2/2*winrate)*ln(RoR)

BR = -(20^2/(2*2)*ln(0.05)

BR = -100 * -2.996

BR = 299.6 BB's

Again just a guideline, as it depends on RoR and SD.

There are other formulas that use Kelly Fractions to calculate appropriate buy ins again based on aversion to risk, that can be used for NL and SnG's etc, but it needs a decent understanding of Kelly Criterion, which confuses the hell out of me. I suggest you use Google to explore these options.

Another caveat. It can be counter productive to have an overly conservative BR. Yes that's seems a paradox, but thinking about it, it does make sense. Lets say your winning at 100nl cash game for a winrate of 4PTBB/100 over 50k hand sample. And you have say a 75-100 buy in BRM. One could assume that at that winrate, then you could easily be making a profit at 200nl, but your restricted by making the move b/c of your BRM. Again just something else to think of.

Anyways sorry for the confusion and thx to AG for pointing it out.

 

[RickH2005]

huh?

I have a good story about bankroll management well I am glad to say I went from $0 to $200 dollars from bankroll management. Well my guidelines were to play head up only in tables who has only one person. I knew that if i were to play against one person it would give me a greater chance of building my bankroll. I first went into a table with a guy that had $10. He thought he could push me around by going all in. Boy was he surprized when I double up from him two times. I trapped him with trip K's one hand vs two pair. The second time it was full house vs nothing. After that table i had 13 dollars in total. Then that was when the fun began. although I didn't have strict guidelines like Chris Jesus Ferguson I played tight. My rules were if i won 1 dollar or more on a table i take the money and move to another table i kept doing this until i got to 37 dollars. Then i sufered my first major loss i lost 21 dollars on one hand my full house was beaten by a bigger full house. I had a new rule that I had which made me reckless but i was successfull at the same time. I kept using the mind set of me not caring of going bankrupt. I never thought twice about something. Me not caring about losing my money help me to where i am now.

'Not caring' about loosing money?? Of COURSE I care if I loose money! What I DO do tho, is never deposit MORE than I can AFFORD to loose! I think you can TELL yourself 'I don't care if I loose my money', but BELEIVING it are 2 different things!

 

[aliengenius]

a decent understanding of Kelly Criterion, which confuses the hell out of me.

Kelly Criterion essentially states that you should bet the % of you bankroll equal to the % of your edge on a given gamble.

So for instance, if you have a 50% edge (say are getting 2:1 on your money on a fair coin flip), and you have $100 you should bet $50 on the first flip-- if you win you now have $200 and should bet $100 on the second bet. If you lose you now have $50 and should bet $25 on the second bet. Etc., etc. "Theoretically" you can never go broke, as you bet is always a % of you bankroll (you would only bet 100% of your roll on a 100% sure proposition).

Professional blackjack card counters use Kelly to manage their bankrolls in terms of their bet spread (often they will use something like "half Kelly" or even "quarter Kelly" for more conservative brm). It's pretty simple to calculate mathematically exactly what their edge is against the house given the current count, but the same calculation of your "edge" in poker isn't that easy of course .

Note the Kelly Criterion is the fastest way to build wealth/BR in relation to Risk of Ruin. For a super awesome read on Kelly Criterion (and other sweet math, like statistical arbitrage, related to gambling/investing), one that I can't recommend enough, get Fortune's Formula by William Poundstone.

Another caveat. It can be counter productive to have an overly conservative BR. Yes that's seems a paradox, but thinking about it, it does make sense. Lets say your winning at 100nl cash game for a winrate of 4PTBB/100 over 50k hand sample. And you have say a 75-100 buy in BRM. One could assume that at that winrate, then you could easily be making a profit at 200nl, but your restricted by making the move b/c of your BRM. Again just something else to think of.

^^an excellent point, and one I'm sure i suffer from. I like 100x buy-in myself .

 

[BONES87]

thanks a lot talk about some great detail.

 

[antizzle23]

that really helps me with my bankroll problems
thanks

 

[kidkvno1]

Thanks AG

 

[arcbishop420]

my question about bankroll management is i play casino games (slots) and i seem to be lucky enough but i win and lose there whats the max % of your bankroll u should use in a casino version of online poker?

 

[Exit141RTe1]

I palyed in a number of tables and a few tourneys and I can tell that my experience is very similar as those described above. Take today for instance. Got rivered three times, lost two with full houses, one with the other player needing tboth the turn and river to catch up. Brutal! Hard to think any management stratagey would help today.