24 Jun 2024 moving up stakes rake bankroll distance Bankroll management and handling your poker finances well is one of the top skills to have as a gambler! Without proper bankroll management no amount of talent or skills will matter. It should be based on ROI (return on investment), field size, volume, rake, and game type. Knowing which variables are important to how big of a bankroll you should be is vital, so let's talk about in more detail! Main Mistakes Made by Players One of the biggest mistakes many players in small stakes tournaments make is not playing with a proper bankroll. Today, we will discuss bankroll management for poker tournaments. It's crucial to understand that if you don't have money in your bankroll to play poker, you can't play. And if you can't play, you can't extract value and grow your bankroll. To win at poker, you need to do only three things, which might sound easy: 1. Find a game you can beat. This means either being much better than your opponents or playing against opponents who are terrible. 2. Play frequently. You need to put in the time and play regularly. If you play only once a week, it will be hard to grow your bankroll because you're not playing enough. 3. Maintain a proper bankroll. Many players forget this crucial aspect. Let's go through various concepts related to bankroll management and discuss how many buy-ins you should actually keep in your bankroll. Note: In today's topic we’ll mostly speak about live poker, but this information also applies to online. Return of Investment (ROI) First, you need to know your return on investment (ROI) when you play a tournament. Your ROI is the average amount you make per tournament. How do you calculate this? Your ROI is your profit divided by your buy-in. Profit is the amount you cash in tournaments minus the total buy-ins you paid. For example, if you play 100 tournaments with a $10 buy-in each, totaling $1,000 in buy-ins, and you cash for $1,500, your profit is $500 ($1,500 cashes minus $1,000 buy-ins). Dividing your profit by your buy-ins gives you an ROI of 50%. If instead, you cashed for only $500, your profit would be negative $500, resulting in a negative 50% ROI. Remember, your ROI can vary for each tournament. This variability depends on factors such as the size and skill level of the field. For instance, a larger field with more weaker players will likely increase your ROI, while playing on a day with only strong regulars will decrease it. Similarly, playing in higher buy-in tournaments against better opponents can also lower your ROI. It's essential to make an accurate estimation of your ROI to determine if you are properly bankrolled for a game. You may be sufficiently bankrolled for a game with soft opponents but not for a game with tougher competition. Softer games naturally result in a higher ROI, while tougher games lead to a lower ROI, potentially leaving you underbankrolled for the buy-ins you're accustomed to. I'll give you an example. One time I flew to Los Angeles to play a $10,000 buy-in main event. The day before the tournament, they had a $5,000 buy-in side event. I fully planned on playing it, but when I arrived and looked at the field, I saw there were 60 players in total, with two bad players and 58 of the best poker players in the world. Do I expect to have much of an edge against the 58 best poker players in the world and two bad players? The answer is no. Even if I'm slightly better than the top players and significantly better than the bad players, I might achieve a 10% return on investment (ROI) for the day, which amounts to $500. That's not insignificant, but is it worth participating in a slow-structured tournament? In this case, I decided it wasn't. Instead, I went downstairs and played cash games with a bunch of recreational players and won a lot of money. This situation illustrates that you need a much larger bankroll if you have only a 10% ROI compared to playing a main event where you might expect a 75% ROI. As your ROI increases, you need a smaller bankroll. In general, I recommend estimating your ROI to be lower than what you observe or believe it to be, just to be safe. This is especially true if you've had some big wins. In the example given, we only played 100 tournaments. It's important to emphasize that 100 tournaments is not a lot. Let me make that clear: 100 tournaments is not a lot. What often happens is that players win, say, $3,000 over the course of 100 $10 tournaments, achieving a 200% return on investment (ROI). They then start to think they're amazing at poker, believe they need almost no buy-ins in their bankroll, and expect to crush the games easily. However, they fail to realize that 100 tournaments is just not a significant sample size. Always underestimate your ROI and be logical and reasonable. Ask around about what constitutes a good ROI. In very tough games, something like a 5% or 10% ROI is very good. For example, in the tournaments at the PokerGO studio that I regularly play, no one has a very high ROI because everyone is very skilled. In softer main events with many players, you might achieve a 50% or even 100% ROI if you're exceptionally good. However, you should always assume you're on the lower end of that spectrum to be safe. In local tournaments, like a Friday Night $100 buy-in, you might achieve a 20% ROI if it's a turbo one-day event, and possibly not even that much. Also, remember to account for the rake — your buy-in includes the rake, which should be factored into your calculations. If we were playing $113 tournaments instead of $110 tournaments with a $3 rake per tournament, our profit would be reduced to $200, resulting in a 20% return on investment (ROI). Thus, a large rake significantly impacts your win rate, so always account for it. It's crucial to underestimate your edge; this lesson was imparted to me by my first poker coach, Bill Seymour, and it's been invaluable. It saved me during upswings where I could have overestimated my skill and helped during big downswings by ensuring I had enough in my bankroll. How to pick a right tournament poker coach? Tournament Bankroll Requirements What are reasonable bankroll requirements? Assuming a 30% ROI, the number of players in the field affects this. The more players there are, the more variance you face. For instance, in a 1200-player tournament, even if you're excellent, you might only win once every 600 tournaments on average. And during dry spells, you might go years without a win. This variability explains why some players have numerous World Series of Poker bracelets while others have none, despite playing similar events. For nine-player tournaments with a 30% ROI, you'd need 24 buy-ins. However, in reality, no one achieves a 30% ROI consistently in these fast-paced, structured games. In such formats, a 10% ROI might be more realistic, necessitating around 100 buy-ins. Conversely, in 45-player or 90-player tournaments with lower rake, a 30% ROI is feasible, requiring fewer buy-ins. For instance, in a 45-player local tournament with a 30% ROI after rake, you might only need 69 buy-ins, amounting to $690 if the buy-in is $10. While this might seem like a substantial amount, it's necessary to weather inevitable downswings. Every poker player, regardless of skill, experiences strings of tournaments without cashing. The goal isn't just to cash but to consistently apply solid poker fundamentals, which ultimately leads to long-term profitability. If you're playing in tournaments with 500 players or more, winning won't happen frequently, so you must prepare for significant variance. In such giant field tournaments, you might need around 375 buy-ins or possibly more. This requirement often catches people off guard. However, it's not always necessary to have the full 375 buy-ins in your bankroll upfront. You could plan to have that money available from your job or take a calculated shot, knowing you might play this tournament once a year. While it might not be the best financial decision for that particular event, it might not be overly detrimental in the grand scheme if you're prepared for the variance. Moving Up Moving up in stakes is another consideration. In tournament play, you rarely stick to the same buy-in level all the time. For example, at your local casino, you might play $200, $300, or $500 buy-ins. To determine your overall return on investment (ROI), you can add up all your buy-ins and cashes. However, it's crucial to track your performance at each stake separately. You might find that you perform significantly better at $200 buy-ins than at $500 buy-ins. In my experience coaching players, they generally excel more in smaller buy-in games than in larger ones, for various reasons. Tracking your performance diligently across different stakes helps you understand where you have the best edge and where you should focus your efforts. Smaller buy-in games typically have more recreational players, giving you a larger edge. As you move up in stakes to bigger games, financial pressure might affect your performance, nudging you out of your comfort zone and potentially impacting your play negatively. So, how should you approach moving up in stakes when you're properly bankrolled? You'll want to increase your average buy-in gradually. One effective strategy is to participate in larger buy-in, softer events. These tournaments are often at their softest during major tournament series or monthly flagship events at local casinos. During these times, many cash game players transition to tournaments, and there are often satellite qualifiers bringing in less experienced players accustomed to smaller stakes or different tournament structures. These conditions create opportunities where you're likely to have a significant edge. When moving up, it's advisable to narrow the spread between the stakes you play. For instance, if you're comfortable with $200 buy-in games, jumping straight to $1,000 buy-in tournaments is risky. Many players make this mistake, playing $200 games locally all year and then splurging at higher buy-ins in major events, hoping for a big payday. This approach often leads to busting out and repeating the cycle without building substantial winnings. Poker is a path to wealth slowly and steadily — not through quick gains. Avoiding massive field events near the upper limit of your buy-in range is crucial. These events tend to attract a broader range of skill levels, including many high-caliber players who can quickly deplete your bankroll if you're not prepared. In summary, moving up in stakes should be done cautiously, focusing on gradually increasing your buy-ins during opportune, softer tournament periods. Resist the urge to chase big scores in high-variance environments and instead build your bankroll steadily over time. If you typically play $500 buy-in tournaments at your local casino and a $100 buy-in tournament with 1,000 players comes to town, it's a mistake to jump into such a game with a much lower buy-in than you're accustomed to. Even if it seems tempting due to the larger field and potential softer competition, it's not advisable. One approach could be to sell some action for the $100 tournament, treating it as if you're playing a $500 or $1,000 game. This strategy keeps your financial exposure similar to what you're used to, albeit in a larger and potentially softer field. However, the key point is to avoid risking significantly more than your normal buy-in in a game with higher variance. Playing seven times your usual buy-in in a game with greater variance is risky and often leads to disaster. While it's tempting to chase big scores, few succeed in hitting big paydays this way. Many remain stuck in smaller stakes games indefinitely. My aim is to help you avoid that scenario. Moving Down Moving down in stakes in tournaments is a common necessity when things aren't going well, which happens frequently in poker. If you look at the results graph of tournament players, it often shows a downward trend interspersed with occasional spikes from wins. Whether you're properly bankrolled or not, there are logical steps to take when moving down to minimize the impact on your win rate. Prioritize playing in the softest tournaments available. This is crucial, especially if you have other commitments like a job. Typically, nights and weekends offer softer fields compared to weekday afternoons when more regular and tougher players tend to compete. Secondly, avoid participating in gigantic field events. Many players mistakenly believe these events offer the only chance to recoup losses or make significant gains quickly. However, the goal shouldn't be to break even or chase big scores; it's about sustaining your bankroll and consistently playing in games where you have a clear edge. It's tempting to aim for quick riches in poker — especially after a downswing, but longevity in the game comes from disciplined bankroll management and focusing on games you can beat over the long term. Remember the basics: find a beatable game, play it consistently, and maintain a proper bankroll. Following these principles will lead to sustained success, relying less on luck and more on skill and poker strategy. If you know someone who struggles with bankroll management, sharing this advice could be transformative for them. Encouraging proper bankroll practices can make a significant difference in their poker journey.