Managing Your Online Bankroll and Staying Ahead Of The Game.
As promised, I'm writing this column on how to better manage your poker money or so called "bankroll". This piece will deal more with managing the downside in online poker, while my next offering will talk to managing the upside.
Now, of course, there are different ways of doing things but I'm going to tell you what works best for me. The lessons here can be applied whether you play Texas Holdem online or in person. This article talks more to a real money cash game player but the concepts are easily applied to single and multiplayer tournament play, as well. Ok, here we go...
I have written many times about my background in finance and many moons ago I was reasonably successful at trading stocks and options. The single, most valuable lesson I learned when trading was to put a proper money management system in place.
I learned from someone a lot older and wiser than me to put rules in place, establish routines; instill a discipline that you can stick to on a daily basis. Without this I never would have been successful and I'd be like the majority of people that trade stocks or play poker, for that matter, a consistent loser.
At the end of the day, what differentiates the minority that make money, from the majority that lose it, is a good money management system (this goes for most anything in life or business). Think about it, you could lose money on 8 of 10 stock trades, cutting your loses at 5% for each of the 8 losing trades and with the 2 winners make enough to turn a profit, overall.
But if you let the losers drop precipitously, without having a sell discipline in place, it's not going to matter what happens with your 2 winning trades. I apply these exact same principles to how I manage my poker bankroll. Let's take a closer look at what I'm talking about.
First, I hear people complain all the time about how they were 'up big' and gave it all back and then some. Secondly, I see it happen almost every time I play cards. Every time I play, I see players losing and going to get more money, more money, more money. The point is this, you can be the best card player in the world but if you manage your money poorly then your results will always be below average.
Texas Holdem is a tough game. The game delivers bad beats to all of us and can be very cruel and unrelenting at times, there's nothing that you can do about that. You can know the game odds cold or know your opponents tendencies to a tee; none of this matters sometimes. The only thing you can control is your emotions, how you react to these situations and the amount of money you put in front of you .
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How many times have we all seen a player, whose a 3 to 1 favorite in a hand, take a bad beat, get pissed off, get another $500 and make poor decisions the rest of the night and inevitably give back the $500 and then some? I have seen friends that are good players, go on TILT, temporarily lose their minds and give away their entire bankroll in one night. Not me and hopefully not you and here's why...
Although, these days I win more then I lose on a time over time basis, the difference is when I lose I cut myself off when I'm down $500 and call it a night. Now $500 is an arbitrary number depending on your bankroll, it could be $10 or $100,000 but the key is it should be a reasonably small percentage of your overall bankroll.
On the flipside, although I may be losing as many times as I'm winning, my upside nights are far superior to the $500 losing nights. Typically, I'll make somewhere in the neighborhood of $1500-$3000 on winning nights. I become a much more dangerous player when I have more chips and if your skill level is above average this should help to pad your profits, like it does me.
Sure there are going to be periods where you may have poor luck for what seems like an ungodly amount of time, but if you limit your downside risk and protect your bankroll, it's bound to turn around for you. Just don't get caught in the emotion of it all and keep going back to the bank when things are not going your way.
When I see that kind of player, I start licking my chops because I know he's not thinking clearly and has now become a target. Much like a wounded gazelle in the Serengeti, there isn't much hope for him!
Instill a discipline, limit your downside, grow your bankroll and then you'll have more flexibility with setting your parameters in the future.
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Good Luck!
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****Important Update: (for 2008)************
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2 - Our site recently underwent a bit of a facelift, we added many new articles to blend in with our original content - much of which we decided to leave undisturbed. We felt it was important for our audience to have access to all the inside information on playing winning online Texas Holdem. Enjoy!
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