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Agressive bankroll management?

    • Avatars91
      Joined: 18.12.2009 Posts: 2,689
      What do you guys think about agressive bankroll management? Provided you are a winning player it might make sense, perhaps, to deviate from the somewhat conservative bankroll management suggested in the article?
  • 4 replies
    • Anssi
      Joined: 03.07.2008 Posts: 2,173
      The bankroll management articles teach is really aggressive already. You should tighten up instead.
    • pzhon
      Joined: 17.06.2010 Posts: 1,151
      A general rule is

      bankroll = comfort * standard deviation^2 / win rate.

      Comfort depends on your personal risk tolerance and willingness/ability to move down. A comfort level of 2 is aggressive, and 4 is conservative. Your instantaneous risk of ruin (the risk assuming the games stay the same and you never tilt or change stakes) is about 1/7^comfort.

      The standard deviation of a 9-player 50-30-20 SNG is about 1.5-1.55 buy-ins. It is not sensitive to your playing style.

      Your win rate should be expressed in the same units as your standard deviation. You should include rakeback.

      Suppose you choose a target comfort level of 3, your standard deviation is 150% of a buy-in, and your ROI is 5%. The recommended bankroll is 3 * (150^2) / 5 = 13500% of a buy-in = 135 buy-ins.

      If your win rate is lower because you play in tougher games, you need a larger bankroll to be as safe as someone with a higher win rate. You need to be aware of the possibility that the games will change and that your edge will drop. The bankroll formula above does not protect against this risk or tilt. It protects you from most of the fluctuations you face if you are immune to tilt.

      If your ROI is higher in lower stakes SNGs, then it is possible for playing in higher stakes games to be better than nothing, but better still to play in lower stakes games. You should usually be overbankrolled for your current stakes because of this. For more details see the bankroll management section of my book The Math of Hold'em.
    • pzhon
      Joined: 17.06.2010 Posts: 1,151
      Provided you are a winning player it might make sense, perhaps, to deviate from the somewhat conservative bankroll management suggested in the article?
      Bankroll management is really only supposed to be for winning players. Players who are not sure they are winning should use a budget instead. If you are a losing player, you will burn through any amount. A large balance will not give you skill or protect you from losing play.

      People talk about bankroll management for new players who should not assume they already have expert-level ROIs. The amounts are not safe bankrolls. Instead, they are suggestions of amounts to budget for giving poker a try. It is also assumed that it is not a disaster for a new player to bust out. New players are not counting on a poker income to pay the rent, and it is not so hard to find another $50 to try again. So, don't extrapolate from the small number of buy-ins suggested to new players. These amounts may give you an unacceptably high risk risk of ruin if you use them later.
    • Gerovit
      Joined: 16.01.2011 Posts: 1,310
      Sorry i didn't read whole thread please delete this :f_frown: