Bankroll management is one of the most valuable tools that a player can have away from the game itself. Without proper management of the money that you are playing with, you will be leaving yourself vulnerable to going broke at almost any moment. Unless you have a virtually infinite supply of money, bankroll management is going to be something that you need to practice with regularity. If you are just a casual player it is not going to matter all that much, but the less that you bother with bankroll management, the more likely you are to lose.
The exact definition and utility of bankroll management is going to vary from game to game. For a cash game player, an ideal bankroll is going to be different than that of a tournament player. You will be using different metrics to gauge how much money is needed; the variance is going to be different, and so on and so forth. Lumping all bankroll management strategies into one group is never going to be a logical plan. You need to not only understand bankroll management, but you also need to be able to cater to your own needs. What works for one player might not work for another, so you need to be willing to adapt to the safest plan possible.
One of the big things about bankroll management that many disregard is the need for winning play. A lot of people talk about their bankrolls as if they would be winning players if only they had enough money. The simple fact is that a losing player is going to lose whether they have one buy in or 100 buy ins.
Beyond this, your actual requirements and outlines for reasonable bankroll size are going to be largely determined by your ability to win. Small winners will need more money in the bank than players who are consistently winning big, month after month. The reason for this is that small winners are more susceptible to losses than big winners. While it would not hurt to understand and implement proper bankroll management if you are not a winning player, it is only going to get you so far. If there is one benefit to managing money for a losing player, it is that they will lose their money at a slower pace.
Bankroll Management for Cash Game Players
Cash game players need to have a lot of money on hand not only for their long term bankrolls, but also for day to day play. It is not at all uncommon for a cash game player to lose a handful of buy ins in a day, so if you do not have enough cash on hand at all times, there is a good chance that you will need to call it an early day. This is one of the big differences from tournament players as you will only need whatever the fixed buy in is (unless you are in a re-buy or add on event).
The lower the limit cash game you are playing, the less buy ins that you will need to have available. The general rule of thumb is that lower level games tend to have less variance because they are of a lesser skill level. In fact, if you are continually going broke when playing in small and mid limit cash games, you are only proving that you are not actually a winning player at all. It is much more important to first ensure that you are winning than it is to save money for an inevitable loss.
Cash games, for all intents and purposes, will generally refer to 6-max or full ring tables. For the purpose of this article, assume that cash games are in a brick and mortar casino. For the most part, the basic guidelines are going to remain similar for online play as well.
In cash games at the micro stakes, 25 buy ins is a good foundation. This is a number that provides you with decent backing while not going overboard. If you are going broke with this type of start at micro or small limit games, you need to rethink your strategy. For mid limit games, adding 5 or so more buy ins is going to work for the majority of players. As you trend upwards into high limit games, 35-50 buy ins becomes the norm. For deep stacked play, make adjustments accordingly. You are going to need more buy ins when you are playing in more competitive games, and this is the reason why each progressive limit is harder and harder to reach in cash game poker.
Bankroll Management for Tournament Players
Tournament players tend to pay less attention to bankroll management than anyone else. Typically sit and go players are lumped in with tourney players, but they will normally adhere to stricter bankroll management ideals than tournament players. The reason for this lack of management is found in the nature of tournaments. One of the big reasons why tournaments are so profitable is found in the average player pool. Unlike cash games, amateurs are spotted left and right and usually make up a bulk of the field. These types of players just want to play poker for one fixed cost with the chance at a huge win. You can't blame them, and they are going to be the source of most of your earnings.
The reason that you need a lot of buy ins for tournament play is found in the fact that there are so many amateurs. The high volatility of tournaments allows for the less skilled to win from time to time. Since your edge is going to be diminished in the short run, you will need to have an ample amount of buy ins on hand to help compensate for the inevitable streaks of non-cashes. Even when you cash, though, you are frequently going to make pretty small amounts. While cash games are a long term proposition, tournaments are going to take even longer to balance out, and they may never balance out at all.
It is difficult to set a number for the amount of buy ins that tournament players should have because there are just so many different types of events. You could be playing online, offline, turbos, re-buys, deep stacked, etc. etc. As a bare minimum, most experienced, winning tournament players will advise a bankroll of at least 100 buy ins.
While this is widespread as a good basis for where to start, you know that most players in the World Series of Poker Main Event don't have 1 million dollars to their name for the $10,000 buy in. It all goes back to how seriously you take poker. If you are in it mainly for the money and want to increase your chances of success, you will play events that are only within your bankroll. If you are just playing recreationally or for fun, having a significant amount of buy ins available won't be nearly as relevant.