In last month`s column we discussed cash games and looked at aspects such as game selection, seating, position etc. This months column will follow on from that, as we look a little further along the list of "must haves" to be successful at poker. One of the most important attributes essential to success at poker is.... Money Management.
So what is "Money Management"?
I`m sure you have all heard the term, but what does it mean exactly? Well, money management means different things to different people. No one players money management will be exactly like anothers, but basically it means what it says, how you should best look after your number one poker asset... money.
Without money there is no poker, no cash games, no tournament buy-ins... nothing. So you would think that all aspiring and established poker pros would have a good sense of money management.... wouldn`t you? Well I`m afraid... they should, but a lot don`t! A large number of capable winning players are continually in a "Boom -Bust" cycle due to their lack of good money management.
Good money management is all about the correct use of money in comparison to the size of your bankroll. Let me say that again so that it sinks in.... "Correct Use Of Money In Comparison To The Size Of Your Bankroll". Some players go down the .. Correct use of money in comparison to the size of your ego route... this is a definite no, no.
For instance let`s assume you have a bankroll of ?6,000 or $12,000. Now do you think it would be good money management to go and take your $12,000 and buy in to the World Series main ($10,000) event because you have always had a dream to play in it? No of course not! But that doesn`t stop thousands of players who are not capable of winning it doing exactly that, year after year. They chase the dream regardless, and for one or two that dream could become reality, unlikely but nonetheless.... possible.
Good money management is not about chasing dreams or rainbows, it`s all about using the correct percentage of your bankroll as appropriately as possible. That way, you give yourself the best possible chance of success. That elusive animal "Success" may not be caught at the first attempt - it can prove very elusive pray. It may take several or even many attempts, so you have to plan for the long run. You have to "stay alive" in the game long enough to get into that long run and give yourself the best chance of success.
Of course conversely, success may come immediately and that can cause even bigger problems for the lucky few who experience it. All of a sudden they go from skint to mint, but they have no clue as to how to manage their new found wealth. After all, when you have just won a couple hundred thousand or more... who needs money management! I've seen this happen so many times over the years, a guy.. or gal, wins a major tournament or goes on a "hot streak" in a big cash game and all of a sudden they have a mighty pretty looking bankroll. Fast forward twelve months and they are back where they started... at the bottom of the pile, wondering what went wrong. The answer? lack of.... money management.
Start as you mean to go on, practice your money management skills from the word go and then, should you be fortunate enough to build a substantial bankroll, you will have all the necessary ability to nurture and maintain it.
So what sort of figures or percentages are we talking about? Well that can vary, but lets look at a couple of examples.
First off an important deciding factor should be the size of your bankroll. Well that can obviously vary wildly from case to case, but, one important principle to be aware of is this; The bigger your bankroll the harder it will be to replace should you lose it.
Let me take a moment to explain. If you have a bankroll of say ?6,000 and you lost the lot then you would have to get a job or similar to earn another six thousand to start over...not so hard . Now lets say you have won a couple of decent tournaments and had a decent run in the cash games and built up your bankroll from ?6,000 to ?120,000. Now if you lost the lot... It's a disaster, because it would take a really decent job to rebuild that baby. (Of course, if you are a professional footballer or bank robber.... Please ignore my last remark)
So the point to remember is, the bigger your bankroll the lower your percentage risk per session should be. If your bankroll was ?120,000, then possibly something in the region of a maximum of 5% or ?6,000 per session would be appropriate.... A ?6,000 loss would not be crippling.
Now with a smaller bankroll of say ?6,000, a larger percentage of around 10% or ?600 per session would be a more appropriate figure, so your maximum loss would be ?600... bad.. but again.. not disastrous.
From the examples above we can see that the principle is.. the smaller your bankroll, then taking a greater risk is acceptable in an attempt to build it up. The larger your bankroll the lower the risk should be (percentage wise) to enable you to ride out the inevitable bad runs.
When playing online the need for strong money management is of the utmost importance. Quite often your entire bankroll is just a few mouse clicks away. How easy it is to go in beyond your means or stop loss limits, and blow the lot in one bad session. If you play long enough you will inevitably fall foul of bad or losing streaks. These can last days, months, or even in extreme cases a year or more, Oh yes, if it hasn't already happened to you... believe me.. it will.
Sometime during your playing career you will be in a game that potentially has the power to destroy you.. no matter what you do. It is vitally important to apply your bankroll management it will be your only chance of survival. When you reach your percentage stop loss ...walk away.. it's not your day.
Remember the key principle is to stay alive.. no matter what (Nice line from the film, "Last Of The Mohicans"). It's essential to keep control during these downswings, either ride them out, move down the limits, or take a break... the choice is yours. Just don't "Tilt" off your entire bankroll in one disastrous session.
Good money management applies equally to tournament entries as well. How on earth do you expect to play your best game if all you can think about is the cost of the buy-in?
Another key issue that relates to your bankroll is your style of play.
It is pointless adopting an aggressive style without having the money to back it up. If you are going to "get busy" stirring it up and creating action, then it's pretty pointless to have little money in play or on the table... How on earth are you going to capitalise on the action you have created?
If you want to play an aggressive style then make sure you are adequately equipped financially to take advantage of the opportunities when they arise. If you are going to build big pots you need as many options as possible to win them, whether it be a legitimate hand or a steal. That's just not possible if all your opponent has to do is call a small "all in bet" on the flop.
Conversely if you go for a minimum buy in, then your plan should be to see cheap flops and only get involved when you hit a decent one. Hit the flop and then extract some money... Don't gamble too much pre-flop as you will inevitably have little or no "ammo" left to shut people out on the flop or fourth and fifth streets. They will be able to see the later streets for little or nothing... a "free shot" to beat you... not a good situation to be in.
One exception to the minimum buy in rule would be if you wish to stir the game up a little. With a minimum buy in you go for broke with a decent starting hand pre-flop, and then if you get lucky and double or treble up fine.. If not then after your first "loss leader" you reload and wait to capitalise on the "Action man image" that you have just created. (Do not try this online as the game may change so quickly it becomes pointless).
So to recap, as a general rule of thumb, put a decent amount on the table if you wish play an aggressive style. On a minimum buy in, choose your starting hands carefully, try to hit cheap flops and... extract the money post flop.
That should give you a basic idea of what money management is all about and we will refer back to these basic principles and discuss others in future columns. One important point to always remember is that poker is not a game of "one size fits all", and the general principles we discuss will always need to be fine tuned to suit your own circumstances. No matter what your bankroll and style of play, or your game type, take the basic principle of percentage limits and tailor them to suit your individual needs.
Whenever you sit in a cash game or tournament you have to have a game plan . Obviously as the game or tournament progresses your plan may have to be altered to suit the circumstances you now find yourself in. Nonetheless always start with a game plan in mind and alter accordingly. Not got a game plan? Ok then that's next months tips and strategies column sorted, but for now....set out and follow a few principles for your bankroll management. Add that to the game choice, table selection and seat position we talked about last month and you will soon be on your way to playing like a pro.
Until next time,
Stay safe, play well and..enjoy your poker.