Until the UIGEA is overturned or other legislation is passed, depositing money online will likely be somewhat complicated, at least in comparison to the glory days when Neteller and other e-wallets were readily available to U.S. players. More players than ever think of their bankroll as something to be protected at all cost. In the face of governmental realities, it isn’t easy to argue they’re “wrong,” but let’s consider another approach to money.Your bankroll does two things: it gets you in the game in the short-term, and provides a comfort zone to play in future games, if your short-term doesn’t work out. This phenomenon is not unique to poker; all investments with some amount of risk can be considered in two time frames. A smart investor thinks about what they want from their money, finding the balance between risk and reward matching their needs and personality. Some people are willing to put a significant percentage of their worth in one stock if they feel it’s a good opportunity. Others are willing to take less profit if it means avoiding risk.
If you’re a successful player, you have an expectation of profit on each dollar you put into play…to be honest, this is the definition of the term “successful player.” As such, you should want to be putting your money on the table, at the highest as you can beat, with as much volume as you can play with your A-game. Money sitting at the bottom of your bankroll, never to be touched by the worst of downswings, isn’t earning you anything.
You can, and many people do, take this to extremes. Michael Craig’s book “The Professor, the Banker, and the Suicide King” opens with a story of Ted Forrest taking his entire $500k bankroll and sitting down in a $10k/20k limit Hold’em game with Chip Reese and Andy Beal. This was, by no means, the first time Forrest played with everything he had on the table, an experience shared by many professional players…and amateurs as well.
The history of the PocketFives message boards is littered with dozens of players’ stories of playing a tournament or cash game for most or all of their bankroll. There are the occasional “zero to $5k hero” testimonials, but most of the time, flirting with going broke leads to exactly that: a busto bankroll. In each case, every player in these stories has one thing in common – they lived to tell the tale. Nothing terrible happened to themselves or their families. Nobody went to jail or had a leg broken. Many of them, in fact, are back at the table, with a bankroll partially or fully rebuilt.
So, should you go ahead and take the biggest shot you can find? Absolutely not…don’t be absurd. Even if you don’t mind being broke, there’s no reason why you should be at zero. If the goal is to keep the “right” amount of funds in play at the tables, this is impossible to do if you don’t have any money.
How do we balance between bankroll “investment” and “insurance?” Good record keeping is crucial for you to track trends and expectations. Know your tournament ROI, or BB/100 win rate in cash games. Find your stretches with the biggest downswings for your typical game. If you want to be an “insurance first” player, take this downswing number and double it…and make this your starting “maximum buy-in” amount for your bankroll.
For example, let’s say I have a $4,000 bankroll and I play high-variance, large-field MTTs on the biggest sites, such as PokerStars or Full Tilt Poker. Over time, and a big enough sample size, I’ve seen a couple swings where I can lose 80 to 90 buy-ins before hitting some scores and recouping my losses. I double this number, to determine I should have between 160-180 buy-ins of my average tournament. Tournaments like the $24+2 events on Full Tilt are a perfect target for me. My range will include other tournaments, like $10+1 tournaments and $3 rebuys, and even up to the $50 nightly showcase events, as long as my average buy-in is around $25.
If you play on sites with smaller MTT fields, like Cake Poker or UltimateBet, your biggest downswing will likely be smaller. The same holds true if you play multi-table SNGs, like the 45-mans on FTP or the 180-mans on Stars. Fewer entrants mean less variance.
If you are primarily a cash game player, tracking your results is similar, only you’re tracking in terms of bets won and lost. If you’re worst downswing is 25 buy-ins over 25,000 hands in your NLHE or PLO game, then you should go with a 50 buy-in limit. I am far less of a cash game player than tournaments, and I welcome someone’s input with a good grasp on what a reasonable sample size is in terms of hand volume…but the analysis technique holds true.
Doubling your worst downswing leaves you plenty of insurance money in your bankroll. 50% of the money you have will likely never see the light of day. If you wish to be more aggressive in your investment, you might explore a couple of options.
You can pick a different downswing multiplier. Instead of doubling your worst downswing to determine your average buy-in number, you can multiply it times 25% or 50%. If I am very willing to gamble and rebuild if necessary, I may only multiply my 80-downswing number by 1.25, and come up with a 100 buy-in limit. With the previously stated $4,000 bankroll, my average buy-in is now $40. I may play the same overall set of tournaments, but take more shots in the Fifty-Fifty, $10 rebuys, etc.
Another thing you can do with your “insurance” money is to stake other players with it. Take half your 50% surplus and put it in action on a stakehorse. In the right circumstance, staking can be fun, exciting and profitable.
At the end of the day, it’s all about determining what’s right for you. Are you investing your bankroll to make the most of it? Or are you using it to insure you’ll always have a game to play?
grapsfan
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