Poker Bankroll Management can be used for two reasons. The most common is to assure that someone always has enough capital to play while absorbing the swings associated with the game. Another good reason is by playing in games that are correct compared to a bankroll, there is less pressure and less chance of going on tilt.
Since everyone has a different goals, tolerances and resources. And also since the true nature of the subject is mathematically quite complex. This page will not go into the details of the math and theory. But cover the general factors standard deviation and win rate needed for poker bankroll management.
Estimating win rate is best done by the hour. Take the total amount of profit and divide by the hours played. This does not have to be exact, a close approximation will do. The more hours played the more accurate a win rate estimate will be.
Standard deviation is basically the fluctuations related to a game. It can also be measured by the hour. The mathematics for measuring it are quite complex. An honest estimate will be good enough. You can estimate it by keeping a mental or written record of hourly swings and then averaging it.
This is the enemy of a professional gambler since it is the risk. It is also the friend since losing players also will win occasionally due to the standard deviation and keep coming back for more.
The higher the standard deviation is the bigger a bankroll should be. If the hourly win rate is low then it needs to be even bigger. This will allow room for big swings in the game and avoid going broke. The best way is to move up and down in stakes according to the size of a bankroll. This is not always correct though since larger games may actually have equal or lower win rate with higher standard deviation. More on this is covered in game selection .
It all comes down to what you are comfortable with and what your goals are. If you want to move up fast and are not worried about going broke take a shot here and there with a bigger game. If you are interested in supporting your family with the game take a conservative approach.
I personally take a conservative approach. But once I am in a game I am fearless and very aggressive. Having a conservative bankroll management approach enables me to play this way. Since no matter what happens on any given day I'll still have more than enough to absorb most bad runs of cards.
No matter what we do theoretically it is impossible to have a Poker Bankroll big enough to avoid going broke. This is a scary concept but true. However unlikely it may be, it is possible to go 5 years without winning one hand, ever! So having a 100% for sure bankroll management plan is not possible. We can only do our best to keep the chance of going broke to a minimum.
In general the further apart the size of the game being played is to the size of the bankroll. The less chance of going broke and vice versa. I personally use these guidelines. They're very conservative since I support my family with the game.
For No Limit Sit-n-Go's................Bankroll = 100x buy-in
For No Limit Holdem Cash Games....Bankroll = 100x buy-in
For Limit Holdem Cash Games.........Bankroll = 500x big blind
This is just the limit to how high I will play. Often I will chose a game lower than what my personal guidelines are since the game is easier to beat, has a higher hourly win rate, and lower standard deviation. This is the topic of game selection listed below.