A Lesson on Bankroll Management

Stu Ungar was, arguably, one of the all-time greatest poker players. Not only did he die with virtually no money, but his like was a constant roller-coaster ride, from busted to flush and the cycle would start all over again. Ungar may be an extreme case but this lifestyle is common in the world of professional poker. To create and manage a successful bankroll management system you must follow these 3 steps.

Start a Separate Bankroll – It doesn’t matter how much poker you play, it is important to have a separate bankroll for poker even if you only play a couple of times per year. A recreational player going on vacation for 3 days should still set aside a separate gambling fund for the trip or else he will lose it all the first day and have to dip into his living expenses for the rest of the trip. A simple bankroll management for this recreational poker player would have been to allocate an amount of money to spend on poker during his trip and then divide it by the 3 days that he is going to be there.

In the poker world there is a term “Left Pocket” which assumes that the money in your right pocket is for gas and food and the money in the “Left Pocket” is the poker bankroll. The bottom line is that whenever you are dealing with money you should have a plan and a way to manage it. It makes good sense to set aside some money just for poker. Keep this money separate. The size of your bankroll will determine the limits that you should play. The major differences between recreational and professional poker players are apparent in the complexity of the Rules that need to be established. From time to time you may lose your bankroll and will need to replenish it. Hopefully, in time, you will be able to take a part of your wins out of your bankroll for personal expenses.

Make Some Rules – If you are just starting out it is recommended that you play at the lowest limits available and move up as you become able to consistently beat that level. Competition changes, and gets more difficult, as limits go up. The first rule should be a maximum percentage, of your total bankroll, that you can put in play at any given time. The absolute highest percentage that you should use is 5%. Any more than that and you risk getting busted after a few bad sessions. A bad streak is normal and everyone has them. It is caused by Variance. As time goes on you will probably add some more rules to the system, however it will only work is you stick with it.

Follow the Rules – The rules are part of your game plan. Because gambling can sometimes be emotional, known as being on “Tilt”, it is important that you follow the rules that you initially made. Do not make any changes to the rule while you are in a game.

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