Bankroll is the term poker players use to describe the money they have for playing poker. Bankroll is different to a person's savings and it is important to manage a barkroll effectively if you expect to make any profit playing poker.
Managing your bankroll effectively is important due to one simple factor – Variance.
Variance is the term used to describe the up and downswings of poker, and all players, irrespective of their ability will experience it at some point.
If you play enough poker there will be periods of time where you consistently lose money, not because you are playing badly but simply because you are getting unlucky. This can happen by losing outdraws (when you have the best odds to win and lose) or Coolers (when you run a big hand into a bigger hand and losing a big pot was inevitable).
Managing your bankroll means you play at certain limits so if the cards don't fall your way you can absorb the losses and not lose all your poker money until your luck changes.
Remember that if you play enough there will also be occasions when the opposite can be true and you will be the one handing out the outdraws and coolers!
NLHE Cash Game bankroll management:
When playing cash games it is recommended a player has at least x20 the maximum table buy-in in their bankroll.
In other words you should never sit down with more than 5% of your poker bankroll.
€2 NLHE (1c/2c blinds) Recommended bankroll €40
€20 NLHE (10c/20c blinds) Recommended bankroll €400
€200 NLHE (€1/€2 blinds) Recommended bankroll €4,000
Other factors of variance:
Loose players who play many pots are more likely to experience higher variance than tight players who do not play as many. Players with a loose style should consider increasing the number of buy-ins in their bankroll to account for the increased variance.
Players are likely to experience greater variance at shorthanded tables opposed to full ring games.
Players are involved in more pots and the more aggressive playing style means they can experience higher variance so shorthanded players should also consider increasing the number of buy-ins in their bankroll.
NLHE Sit and Go bankroll management:
When playing Sit and go tournaments it is recommended a player has at least x40 buy-ins in their bankroll.
€1+0.10 SnG Recommended bankroll = €44
€5+0.5 SnG Recommended bankroll = €220
€20+2 SnG Recommended bankroll = €880
MTT Bankroll management:
When playing Multi-table tournaments it is recommended a player has at least x100 buy-ins in their bankroll.
Though this seems excessive it is important to remember that due to the large number of players in MTTs the variance is very high and it is possible to play several hundred without reaching a final table.
It is also important to consider the average number of players in an MTT in addition to the buy-in when bankrolling for MTTs.
Please note that this is only general advice and bankroll management alone will not make you a winning poker player.