The first thing I want to talk about is proper bankroll management for players who aren’t profitable yet. While we generally are looking to balance potential profitability with risk when managing our bankroll, all we have is the risk side of the equation in this case. We know that if a player is losing on balance then the risk of ruin is virtually certain, at least in terms of the present bankroll. In most cases the player will be looking to replenish it on an ongoing basis, however, the more money that is required to do this, the greater the cost will be while learning.
Now generally speaking, the task of bankroll management is mostly ensuring that you are playing the right stakes for your situation, which takes into account your profitability and your risk tolerance, along with your ease of replenishment. It would seem to follow then that if you’re not profitable yet, then you need to be playing the lowest stakes possible.
That’s not necessarily always the case though, although for a lot of players it definitely should be. If you’re willing to spend a lot of money on your poker education, and don’t mind losing in a lot larger chunks than you need to, then there is something that can be said about losing at small stakes rather than micro-stakes. You at least have the potential to learn poker a bit faster against slightly better opponents.
For the overwhelming majority of unprofitable players though, this is a mistake, and ends up costing them a lot more money to learn, and even leads to the demise of a great many. When people give up the game it’s very seldom the case that they are making money at it. There are other reasons, like they have become bored, but almost always the common element is significant losses.
Moving up in stakes as you improve on your game
At this stage you’re going to lose money anyway, why not look to keep this to a minimum and also go up against players that may be a little easier to beat? The higher stakes will still be there when you are ready. A lot of players claim that the micro-stakes games aren’t exciting enough for them, but if that’s the case then by all means play higher, although you don’t need bankroll management if that’s the case, you just need an entertainment budget.
So let’s move on to the stage where you are now profitable, with some kind of reasonable certainty, which even includes beating your current stake and thinking you have a good chance to beat the next level up. Newer players tend to be too bold in their thinking here, just as they are too bold picking too high a stake for both their bankroll and their ability when they start out playing.
More experienced players tend to err too much on the side of caution though, and in particular will tend to stay too long at a given stake, thinking that they need much more certainty than is really the case. Better informed players though realize that there’s no need to think of these advances as all or nothing choices, and are willing to put up excess portions of their current roll at their current stake to take shots at the next level.
Sticking to proper buy-in levels with your bankroll
For example, let’s say you are a heads up sit and go player, and you’ve decided that based upon your win rate, that 40 buy-ins is a comfortable situation for you. There’s some risk of ruin, but you’re able to tolerate it, especially if you’ve incorporated the strategy of moving down stakes when necessary. A great many players don’t even consider doing this, as it’s a psychological blow to them. What this does accomplish though is reducing your risk to a point where you can afford to be more aggressive on the upside, and given that you have a positive expectation overall, this makes perfect sense.
So you have your 40 buy-ins at your given level and you want to move up to the next one. One option is to wait until you have 40 at that higher level to make the move. However, that will have you at your current stake longer than you need to be, and once you do move your whole roll up, you will be questioning yourself if things don’t go as well as you had hoped. This questioning is definitely reasonable though, as you really don’t know yet if you belong there and it would be foolish to blow off your whole bankroll if you are not.
So let’s say you wisely decide to protect yourself and set a cut-off at 10 buy-ins down, and you’ll move back down if that happens. So this is pretty much the same thing as taking a shot with 10, only we now need to ask why you waited to get your whole bankroll set up for this higher stake? It wasn’t necessary at all, and you’re not being efficient if you do. So if you’re going to just take a shot, as you really need to be confining yourself to unless you’re going to throw caution to the wind, why not do it at 40+20 buy-ins rather than 40+40?
Depending on the level of confidence and certainty you have, you don’t even have to wait for 10, you could do it with 5 for instance, or even mix in a buy-in here and there and monitor things to gain more information about where you are at prior to making a bigger commitment. If you’re playing cash, you could do the same thing with a couple of full buy-ins. This isn’t anywhere near as much about the math as some people think, it’s much more about what your comfort level is, and the best advice is to find a scheme that you feel good about and just go with it.
As you gain experience you’ll be able to tweak it to get it to better fit what you want to accomplish and your skill level. What you always want to keep in mind though is that if you’re profitable then you’re really only risking part of your profits, or you should at least confine yourself to that. So you can’t go too far wrong here given that strategy.
So once again, if you’re not profitable yet, generally look to minimize your losses while learning the game. If you’ve made it to where you’re making money at the game, don’t be afraid to risk part of your winnings playing a little higher, but always look to use good judgement here.