Bankroll Management

Tournament players, disregard this post.  This is actually a tough discussion but very necessary at the same time.  I just finished reading a chapter from Annie Duke's excellent book, "Decide to Play Great Poker" that addressed this subject.  The most important concept is setting a "stop loss" limit.  Too often we end up losing much more than our bankroll can handle due to several factors:  desire to get even, juicy game, on tilt, was way up and then lost, etc.  She compared setting a stop loss limit before you begin playing to handing your car keys to a friend before you begin drinking.  That way you do not make a poor decision when your judgement is impaired.  I like the analogy.

So, the stop loss can also be applied to a "stop win" situation as well.  Let me run down the scenario.  You have been running well in a juicy game and are up $400 on your $150 buy-in.  Great, you now have $550 in front of you.  But, you lose a few hands due to bad beats and suddenly you are "down" to $300.  Never mind that you are up from your original buy-in, it still feels like crap.  This is the time the stop loss should kick in.  You are not running good anymore, your table image has taken a hit, and you are psychologically beaten.  The "stop win" should kick in if your "stop loss" is one buy-in since that is more than you have lost from your peak.  Basically you can constantly reset your stop win if you continue to run good, but be prepared to quit if you drop past your original stop loss.

This will accomplish some good things.  One, you can leave a winner and fight another day (with a bigger bankroll).  Second, you can feel good about your self discipline.  And last of all, psychologically you are healthier.  You have money to play another day which is not always the case if you just sit there and pile on losses.

True story about my biggest loss in a limit game.  Several years ago I was playing in a very loose 3/6 limit game.  The usual suspects were there to raise and re-raise every pot.  My normal stop loss is 2 buy-ins, but due to the wild fluctuations and huge pots I decided to keep re-buying.  At one point I was "stuck" $700 but so convinced that it would turn around for me that I tossed my wallet to the floor supervisor and said give me chips.  I had almost a $1000 on me.  Lucky for me, I only lost about $40 more before coming to my senses and cashing out.  Had I put my normal stop loss in play, I would have left with $500 more in my pocket to "fight another day".  I have had similar things happen, normally while playing a smaller game, but never to that level.  I have learned to be very careful in small games as you can lose more than in the big games and it is also very difficult to beat the rake.