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I’m not an expert poker player. But I have had a lot of experience with moving up – and down – in stakes. I started out like most clueless poker hopefuls and played extremely high for the size of my bankroll. After winning a few freerolls and floating around in the micro SnGs, I moved over to cash games. And there I sat with my $20 at a couple of 10NL full ring tables. After nearly busting my roll more than a few times I decided that there must be a more sensible way of managing my poker money. This article is from the perspective of a part-time full ring NL player that has managed to never make a single deposit out of pocket in the first 2 years of his poker “career.”
Before we get started, keep in mind that Bankroll Management is for winning players. If you are not a winning player, I encourage you to stop reading now, bookmark this article for future reference and read up on some good strategy to get you started in the right direction. Until then, following the advice in this article will not help you, and the stakes you choose to play at will only determine how fast you lose money.
The ideas contained in this article are not sourced as I could not possibly compile a list. Many of these ideas have become common knowledge in the 2p2 community and have been repeated in countless threads. Several people that come to mind from which I have drawn ideas regarding this topic are: Fimbulwinter, Phzon, WCG|rider, Alan Schoonmaker and of course Mason Malmuth.
Winrate
We have an engrained notion in our poker psyche to not be results oriented – at least this is what we strive for. However I assume that most people still have that results oriented mind hiding somewhere no matter how much they try to suppress it.
It is somewhat odd then that we think of winrates with such importance. If we follow the logical conclusion of calculating our winrate, it ultimately ends with the answer to how much money did you make if we apply the use of winrates with our results oriented minds. It’s good to set goals, but setting goals as far as winrates are concerned is not a good idea because you do not have complete control over your results. If you don’t meet those goals you’ll be disappointed in yourself when you shouldn’t necessarily be.
However there are much more useful ways of using winrates, especially to help us when moving up in stakes:
1. Winrates help us compare our performance at different levels in a more relative sense. You will, or should, make more money at 100NL than at 25NL if you are a winning player at both levels. But that doesn’t really tell us anything, because it’s based on dollars won. Winrates throw out the dollar figure and replace it with a Poker Tracker BB per 100 (ptBB/100) figure. Now we can compare apples to apples when comparing our performance at different stakes.
2. Winrates help us think in terms of big blinds rather than dollars, as stated above. It would be wonderful if poker clients would allow us to display big blinds in our stack and the pot rather than dollars. It would make moving up much easier by letting us play our regular game, not playing scared because your stack is now double the size in dollar amount, and not have to adjust to new bet sizes. I have yet to find a client that does this, but thinking in those terms instead of dollars won is a huge step towards moving up in stakes.
Sample Size
It is important to ensure that you are in fact a winner at a certain level before moving up. Most people underestimate the required sample size that is needed to even start analyzing their game. In my experience, you can really only start to analyze your game after 20k hands, and after 50k hands your analysis can start to become quite solid. But those 2k and 5k hand samples are not going to do it. Keep in mind that most multi-tablers out there can put in that many hands in a single sitting. And at the same time, 50k+ hand breakeven, heater and downswing samples are very possible.
That said, once you are confident in your sample size and your accomplishments over that sample size, you are on your way to moving up. You can now be confident that if things don’t go well at the next level, you can always come back down, re-tool your game, make some money, and rebuild your confidence for another shot. You essentially have the data to back up the fact that says you should never go busto if you are able to move back down when necessary.
Playing Your Game
After successfully beating one level and taking a shot at the next, do not change anything. Play the same game. Play it cautiously and focused, but not scared. A lot of us have made the mistake of playing differently based on our inexperienced perceptions of the new level. The only major difference between the old level and the new level is that there are a few less fish and a few more regs so don’t mess with what’s working.
You’ll also need to keep buying in for the same number of big blinds. You can’t play your game if you try to play it safe and buyin short to protect your bankroll. If you normally buyin for 100BB but want to take a shot with 60BB, your hand values are going to change drastically and your style could become a losing one solely based on the new math behind your stack size.
Be observant and take notice of anything different in the general table dynamics that you haven’t seen before. Is this level tighter, looser, more aggressive, more passive, 3bets more, squeezes more, etc?
You might look at your stats after a significant sample size and realize that there is a big difference in your stats between the old and new levels. If you are sure that you aren’t playing scared and haven’t changed anything, it may just be that you are not being allowed the same opportunities that you were previously although you are still playing the same game. For example, your VPIP/PFR could drop from 15/12 at 25NL to 13/10 at 50NL without changing a single thing in your game. If the new level has better players that are not limping as much, and there’s more 3betting going on, those are just two of many possible reasons that you haven’t had as many opportunities to enter the pot where you did before. There are potential variables like this for all sorts of stats.
Figure out what those differences in table dynamics are and come up with a strategy to try to exploit them. There are going to be adjustments that you’ll need to make to improve as a player and to achieve success at the new level. It’s part of growing as a player. But don’t change anything drastically. Ease in with one adjustment at a time, if it doesn’t work, forget about it and go back to your default style until you find something that works better than your default.
Variance
Variance is going to seem huge when you take a shot – mostly because you will feel like you are playing with 2 buyins or deepstacked. This is another reason why it’s important to think in big blinds rather than dollars. Taking a shot and running good feels awesome. But all too often taking a shot ends up in running bad and/or playing bad and this will be devastating.
As I stated in the intro, Bankroll Management is for winning players. The problem with taking a shot is that you do not yet know if you are a winning player at the new level, so you need to follow the rule that losing players should follow. You need to decide how much you can afford to lose and consider that money to be dead and gone. An added bonus to thinking like this is that the money shouldn’t matter as much to you and you will be better able to play your game optimally.
It is always important to review your hands, but especially so when you are attempting to move up. If you have hit a bad run, review every hand where you put money in the pot and see if you actually played well and just got a bit of negative variance, played poorly, played scared, or did not maximize value in spots you could have – you’ll need to review every hand for this last one, not just your largest winners and losers.
Be Flexible
If your shot at moving up is successful you should try to play at the new level as much as possible. But don’t force it. If the games are not good at certain times of the day for the new level, the old level probably has more good games running. Don’t ever hesitate to sit in a good game. Table selection is key to moving up as well as to building confidence.
Some people are able to table select across multiple levels and it works very well for them. A super fishy 25NL game is way more profitable than a table of 50NL regs any day so if you want to fire up more tables but there’s no good 50NL tables left to waitlist, play that 25NL table. I can’t personally play multiple levels because it messes with my bet sizing – I need to continue to work on thinking in big blinds – but you should certainly give it a try.
Monetary Bankroll
You will find people that say there is a standard bankroll size that you should have, usually in the 20 to 30 buyin range. Everything in poker “depends” on many variables, and bankroll is no exception.
There is a mathematical formula for calculating a bankroll plan for your individual needs that includes the most important variables (and also shows the need for significant sample sizes, as stated previously):
Bankroll = Comfort x Standard Deviation^2 / Winrate
Comfort is the only variable that you get to decide on in this equation, and it’s your own personal choice. It has been suggested that a comfort level of 2 allows an aggressive, high risk bankroll while a comfort level of 4 is more of a conservative, low risk bankroll. This is essentially a risk of ruin formula.
For example, if your comfort level is 2 with a standard deviation of 80 big blinds / 100 hands and your winrate is 8 big blinds / 100 hands your bankroll would need to be: BR = 2 x 80^2 / 8 = 1600 big blinds, or 16 buyins at 100 big blinds per buyin. With the same standard deviation and winrate, someone with a conservative comfort level of 4 would require a bankroll of 32 buyins.
As you move up in stakes, you are going to find two definite trends. Your opponents will be progressively more aggressive and make fewer mistakes. More aggressive games will result in higher variance and a higher standard deviation, while tougher opponents making less mistakes will result in a lower winrate. Therefore the risk of ruin formula will show that you will require more buyins at higher stakes than you would at lower stakes.
Of course this does not take into account the shear dollar amount that is required to mass multitable. You may have a monetary requirement of 20 buyins for your level, but you are going to need more than that if you are playing 18 tables or more for the simple reason that you have to have money left over to reload your stacks.
That said, you do not need to increase the size of your bankroll requirements just because you are multitabling in regards to variance – 1000 hands played over 1 hour will yield the same variance as 1000 hands played over 10 hours – but you may need to increase the size of your bankroll requirements in regards to a drop in your winrate if playing multiple tables causes you to lose focus somewhat.
Psychological Bankroll
There is another level of bankroll management that most people overlook. That is their psychological bankroll. Many bankrolls have been destroyed by playing beyond psychological bankroll limits. You may have the monetary bankroll to play in a game that you can beat. But you have to figure out and get beyond what that money means to you.
When I started at 25NL I played extremely scared because $25 was more than my hourly wage at my day job and the thought of losing $25 petrified me. There are a whole gamut of ways to perceive the value of money: what it can buy, your salary, your rent, your groceries, etc. But if we continue to perceive our bankrolls in this way, it will hinder our progress.
"At the poker table chips are money, but money is nothing. Think of chips only as a tool to extract other chips from other players" – SplitSuit
Playing above psychological bankroll limits can be devastating. If you hear someone talking about “moving up to where they respect my raises” or getting rostucko by moving up to win back losses faster, these are people that are playing above their psychological limits. They are most likely playing tilted and the money matters a lot to them. Bankrolls can disappear within minutes if they hit a bad run or let their tilt overwhelm them.
The comfort level in the bankroll requirements formula is a measure that can be used to quantify your psychological bankroll. We can rearrange the formula to figure out exactly what your minimum comfort level is.
Comfort = Bankroll / Standard Deviation^2 x Winrate
To use the rearranged formula, think about your current regular game. Use the standard deviation and winrate numbers that you have data for, but instead of your current bankroll, use the minimum bankroll size that you would be comfortable playing your regular game with. This calculation will tell you what your baseline comfort level is, which can be compared to your monetary bankroll requirements. It is a good idea to make sure that both psychological and monetary bankroll requirements are met to be able to play your game optimally.
The best way that I’ve found to get over the value of money when taking a shot at moving up is to actually play one level higher than the level I’m attempting to move up to, and then move back down to the level I’m taking shots at. You do not want to do this if a lost buyin at the higher level will adversely affect your bankroll. When you come back down, the money will not seem to be as much when you’ve been watching pots that are twice as big.
Another psychological factor that influences moving up is downswings while taking shots. Most people will refuse to set a stop loss, saying it’s a bad idea. They say that if the games are good and you are making correct decisions, there is no reason to leave. If that applies to you, then good for you for not letting tilt affect you. But for most of us, we can not honestly say this is true. We may say we’ve lost 3 buyins as a favorite and that we made the correct choices so we should keep playing, but we need to take this one step further and ask ourselves if we will be able to continue to make correct choices after losing x number of buyins and set stop losses if necessary, especially when taking shots.
There is also no reason to stay at your regular game if you are on a downswing. If you are insistent on playing through it, it would make more sense to move down a level and minimize losses, because minimizing losses is exactly the same as maximizing profits. This concept applies to both individual hands and your bankroll management as a whole.
Setting Goals
It’s a good idea to figure out exactly what your purpose for playing poker is. If it’s just for enjoyment, you can treat your bankroll as a budget. There aren’t too many hobbies out there where you can have a good time and actually make money, too.
If you want to play poker on a more serious level it is a good idea to progress goals. These goals may be anything from learning about specific strategies that you are seeing as you move up to learning about table selection.
A lot of people also like to set monetary goals if they plan to withdraw funds from their bankroll to purchase something they would otherwise not buy. Maybe a new car or a surround sound system. These can be good goals for helping you work towards something, too.
It is also extremely important to set an end goal. What is the specific final goal you are working towards? It might be to be a 200NL pro, or a 50NL semi-pro to supplement your income or anything in between or beyond. Once you’ve reached these goals, always set new ones to work towards. This will help your continued growth as a player.
Planning Your Move
I have created a Bankroll Management Excel sheet for you to download so that you can manage your bankroll and take shots optimally with a concise plan.
The first sheet “BR Requirements” allows you to quickly see possible bankroll requirements by adjusting the variables. It also lets you do a reverse comfort level lookup to see exactly what comfort level you are enjoying right now with your current bankroll and stakes, or to figure out what your baseline comfort level is as discussed earlier. If that comfort level is getting up there, why not take a shot?
The second sheet “BR Plan” allows you to enter your variables for multiple levels. You can start to see what your minimum bankroll requirements are for each level once your sample size is large enough to ensure your variables are accurate. You can then start to estimate standard deviations and winrates based on your past moves up in stakes and what kind of bankroll you will require in the future. It will also tell you that once you reach a bankroll threshold, you should start considering taking shots at moving up.
The white areas are for you to adjust values. The blue areas are formulas. I chose not to lock the formulas so that those of you who want to can adjust these as well if you prefer to work in big blinds per 100 instead of big bets.
You can download my Bankroll Management Excel Sheets here.
If you do not have Excel, you can open and use this spreadsheet using Google Docs.
In Conclusion
I haven’t covered nearly everything that is involved when moving up in stakes and taking shots, but I hope that this article has helped you in some way as it has helped me in figuring out what I need to do to reach my goals in this game.
Success in managing your poker career requires the same skills that are required while playing the game. You need to gather enough information to formulate a plan, act on that plan, and manage your money to meet those goals. Everything will not always work out but you have the tools to figure out what went wrong and you will be better prepared for next time.
J
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