"Bankroll management" (sometimes abbreviated to BRM) is where you play at certain limits to avoid losing all of your bankroll due to bad runs of cards, which any poker player must expect from time to time.
This is called "playing within your bankroll". Subsequently, if you play at higher limits where there is too great a chance of losing all of your poker money, you are "playing out of your bankroll".
Why is bankroll management important?
The reason why you should choose your limits carefully in poker is due to the variance. Variance is a term used to describe the "ups and downs" of poker where you fluctuate from having bad runs of cards to good runs of cards, resulting in varying profits and losses.
If you play poker for long enough there are going to be periods of time where you will consistently lose money, not because you are playing badly, but because the cards are not falling your way. This means that if you do not have enough money in your bankroll to absorb these big downswings, it is likely that you will lose it all.
Every player, irrespective of ability, will experience variance in their game. Bankroll management is in place to deal with this variance and allow you to continue playing without going broke.
Therefore every time we sit down at the poker table, whether it be live or online, we want to give ourselves the best opportunity to win a maximum amount of profit whilst keeping the risk of going broke minimal. This is where the rules of bankroll management come into play.
So what limits should I be playing at?
Cash games.
Pot limit and no limit Hold'em.
If you are playing pot limit or no limit poker, the safe recommended size of your bankroll is 20 times the full buy-in of where you want to play. This means that if you want to have the best chance of making money at a $1/$2 game where the maximum buy-in is $200, you should have a bankroll of at least $4000.
Another way of applying bankroll management is by only putting a maximum 5% of your entire bankroll on the table at any one time, which works out the same as having 20 times the buy-in for the game.
Limit Hold'em.
If you like to play limit Holdem however, you should have 300 Big Bets as a minimum for the limit you wish to play at. Therefore to play $1/$2 limit Holdem, you should have a bankroll of at least $600.
Tournament games.
It is recommended that you have a bankroll that will give you 40 buy-ins to the level of tournaments that you wish to play at. Therefore if you want to play at the $10+$1 Sit n Go's you should have a bankroll of $440.
Bankroll management table.
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