Poker Bankroll Management for Beginners

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When starting out as a tournament poker player, it’s very easy to get caught up trying to follow specific rules about what to do with your money. You have several options as to how to approach it, but because you haven’t yet proven yourself as a winning player, all of them make bankroll management (BRM) decisions difficult. This article will explain some of the factors and considerations necessary in order to exhibit good BRM as a beginner, without adhering to arbitrary rules that may not actually apply to you.

Game selection principles

The first and most important thing to remember about bankroll management is that if you always play in games where your Expected Value is positive (+EV – in other words, where you are a winner against the field) then you will, in the long run, make money. How long the long run is depends on what games you’re playing, and the degree to which your expectation is positive.

However, the flip side to this is that if you continually play in games where your expectation is negative (-EV),  then you will go broke eventually, no matter what BRM strategy you use. This is crucial, because let’s face it – when you first start out in poker, you’re almost guaranteed to be a losing player at virtually any stakes you could find.

Most people’s approach to starting out is a process of “I’ll play the highest stakes I can afford to play without a significant risk of ruin” – even if you’re game-selecting conservatively enough to avoid going broke with this strategy, it could decimate your bankroll fairly quickly. I believe a much more appropriate rule of thumb would be, “play the highest stakes you have reason to believe you can beat”.

A new poker player who’s just learning the game has no reasonable expectation of winning at any level, so they should start out as low as possible. On the other hand, a cash game player transitioning to tournaments has reason to believe that their skill level is sufficient to beat the lowest stakes, but perhaps not higher ones, so they should start out somewhere slightly above the bottom. This policy ensures that these players are still playing in games in which they expect to have a positive expectation (or at minimum, the least possible negative expectation) so that they can stick around, learn, and improve their game until they become winners.

The role of field sizes

People underestimate the extent to which field sizes play a role in bankroll management. I’ve seen so many players trying to establish ‘rules’ for what kind of bankroll they need at certain stakes – they’re asking the wrong questions. The field size of a tournament has a huge impact on the level of variance involved, and therefore on the bankroll needed to avoid risk of ruin.

If you’re playing $5 games with field sizes of only 50-100 players, you’re not going to be subject to a huge amount of variance, so you’re fine with a smaller bankroll, especially if you’re a winning player. However, if you’re playing $5 games with 2,000-player fields, such as those you’ll find on PokerStars these days, then you’re going to be subject to an astronomical level of variance, and even a very good winning player could go for months without a significant tournament score.

When you start out, it’s tempting to play mostly bigger fields, to give yourself a good chance of making a big score. The fact is, though, that you’ll probably be waiting a long time for that, and you may go broke before you get your chance, even if you’re not playing particularly badly against the field. When you first start out, your average field size should be very small.

Return on Investment (ROI in %)

Obviously, the better you play and the weaker your opponents, the higher your ROI. The higher your ROI, the more money you make on a per-game basis, and the more the variance in your game is offset. Your potential ROI in a certain game is something that will only really come into play after you become a winning player, but you will want to bear this in mind as much as possible when comparing one tournament to another. Importantly, it’s still relevant even if you’re not a winner, for the purpose of minimising your losses.

Imagine you’re considering playing a $50 tournament where you estimate you will have a 10% ROI, but the field is large, and the structure is fast, so there will be a lot of variance involved. The alternative to this is playing a really soft $10 tournament where you believe you will have a 50% ROI, but the player pool is only one-fifth of the size. If you decide you have the bankroll to play either one, which should you play?

The answer is, the $10 tournament. You make a 10% ROI on the $50 tournament so you profit $5/game. Your 50% ROI on the $10 tournament nets you the same $5/game, but now you’re making those $5 with a great deal less variance. It’s not fancy and the potential for bigger scores is minimised, but bankroll management isn’t a gambler’s game, it’s an investor’s game.

‘Taking shots’

The flip side to this last part is that many people will get bored if they play low stakes for a long time and make very little money. Firstly, I think those people should revisit their motivations as often as possible to check that they’re playing poker for the right reasons (i.e. because they love the game, not because they think it’s a good way to make a cheap buck), but secondly, if they do really love the game, those people might just need an extra boost of motivation from time to time.

This can often come in the form of taking a shot at a new tournament. Maybe it’s a little higher-stakes, maybe it’s in a new game format you’ve been studying, maybe it’s on a new site, maybe it’s a special tournament. Whatever the situation, take your shots smartly. It has to be a one-off practice, otherwise you just end up shot-taking all the time and your BRM turns out to be terrible. It has to be justified (i.e. there has to be a reason why this tournament is better for you than another tournament of equivalent value), and you have to treat it like a big deal.

Don’t just fire off a random $200 tournament at the end of your session because you’re on tilt. If you’re going to take a shot, prepare for it, do your research, get mentally warmed up, and focus as intensively as you can on that one tournament. It’s simply not worth taking shots at anything if you’re not going to play your best when you do it.

The bottom line
People play poker for all kinds of reasons. They play it for fun, for learning, for money, for ego, for pride, and competition among others. When it comes to BRM, it’s important to know which of those things matter, and which don’t. The money matters, the learning matters, and to some extent the fun matters too. But the biggest mistake most people make with BRM is letting those other factors get in the way. Ditch your ego, ditch your pride, and think carefully and honestly about which games are right for you.