Online poker is risky business. You never know exactly what will happen in a poker game or tournament, so you need to be able to prevent yourself risking too much of your bankroll at any one time.
Playing +EV and become hooked on poker strategy forums will turn you into a good player, and it is true that you can make massive profits from playing online poker, but isn’t without its risks. Every professional poker player, whether they are making $100,000 or $10 million profit each year will suffer a downswing and lose a hefty chunk of their bankroll to variance. Tom Dwan, for example, who is now a member of the Full Tilt Poker Pro team, suffered a downswing of $750,000 last September, and this could have been even worse if it wasn’t for his incredible $1.5 million win-day on the last Sunday of that month. A regular $500/$1,000 PLO nose bleed stakes player at Full Tilt Poker, every week Dwan squares up against the likes of Ivey, Isildur1 and Power Poker frontman Ziigmund Sahares at the online high stakes tables.
Dwan also managed to suffer a $4 million downswing in November 2009, which had poker forums and communities gossiping and spread rumours that he had gone bust. One forum poster even noted that he had been reduced to playing $25/$50 PLO stakes, such was the heft loss of his bankroll.
As you can see then, variance and poker go hand in hand. There are several things you can do to protect yourself from variance and bad beats when playing online however, and this is called bankroll management
What is Poker Bankroll Management?
Poker Bankroll Management means limiting the amount of your poker bankroll that you risk in any single session, and playing at the right stakes so that you are not too financially exposed. The point is, if you risk too much of your bankroll at any one time, then a few bad beats or suck outs can wipe you off the radar. Even AA vs 55 might make you feel unbeatable, but in fact you are only an 80% favourite. It is not uncommon to lose up to 3 hands like this in a row when you’re playing hundreds of hands each day. What you have to remember about “equity” and these types of statistics, is that they’re modelled in infinite time and based on re-runs of that hand happening i.e. simulated thousands of times over. As such, you cannot rely on them for winning individual hands or guaranteeing that you will win whenever you are ahead. Like the AA vs 55 situation shows, you are actually guaranteed to lose every one in five hands this way even though you are the clear favourite.
Cash Games/Ring Games
When you play cash games, it is strongly recommended to risk only 5% of your total bankroll at any one table. For example, if your total online bankroll (the amount that you are prepared to commit and lose in poker) is $1,000, then you should only sit at a single cash table with a maximum of $50 at a time.
When sitting down at a cash table, it is recommended that you buy-in with a minimum of 100 big blinds. This is the standard amount, and it allows you utilise big stack strategy with a LAG (loose-aggressive) strategy. Having a big stack of 100BBs allows you to take more risks, play more hands out of position or limp from the cut-off, and it prevents you from becoming pot-committed too early on in the hand. If you prefer playing short stack or “half stack” strategy then you can buy-in with just 50BBs. Personally however, I don’t like this method since it forces you to sit out of more hands and realistically you can only call to see the flop for your top 5-10% of hands (i.e. AJo+, 1010+). Being a short-stack is dangerous, reduces your bluffing equity, and in general this type of TAG strategy won’t be effective in the mid-stakes, NL50+ games.
Graph from 2+2 Forum Member Illustrating the Bankroll Required for Moving up the Stakes
MTTs (multi-table tournaments) are extremely popular online, lots of new players enjoy playing them because the amount that you can lose is limited to your tournament entry fee.
The downside to playing MTTs is that there is far more variance in cash games, and you’ll need to play hundreds of games and beat hundreds, if not thousands of opponents, to make a pay day. The bigger MTTs which are played on Sunday, such as the PokerStars Sunday Million, generally have anywhere between 1,000 and 7,000 entrants. This means that you’ll need to outlast all of these players and win a number of coinflips to be able to “break the bubble” or make it to the final table.
MTT prize pools are so top-heavy that over 50% of the entire prize pool is awarded to the top 3 finishes. This means that realistically you need to finish on the final table to build a good ROI and make reasonable profits.
Because MTTs are so difficult to cash out in, it is recommended that you have a poker bankroll to cover a minimum of 100 MTTs for the stakes that your playing. For example, if you have a bankroll of $1,000 than you should only be playing $10 buy-in MTTs or less. This might seem like a massive figure, but the truth is you can easily go 10 or even 20 MTTs without cashing out. Chris Moorman, who was the best UK online MTT player in 2008, at one point went 20 MTTs without even finishing in the money. This is exactly the kind of situation that you need to protect yourself from being in, and having a large enough bankroll allowing you to cover enough volume of MTTs helps.
Finally, your MTT bankroll can depend on the size of the MTT that you’re playing. For example, a smaller MTT such as the $3 180 man MTTs at Full Tilt Poker will only need a bankroll covering 50 buy-ins. You have a better chance of making money in these games since the fields are much smaller. On the other hand, large MTTs like UB’s $60k Sniper GTD on Wednesdays will have over 500 entrants, so you will need a large bankroll covering 100 games at least for these events.
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