Stop-Loss Limits - Pulling the Ripcord

Introduction

In this article we will discuss about...

Limiting losses at the table
How a loss-limit can help keep you from tilting
Why a session should end after losses reach 5 buy-ins or 100 Big Bets

A poker player has to play two roles. On the one hand, you are a competitor coming to the table to challenge other players; on the other hand, you have to be your own coach and manager.

The coach is responsible for the player's training and development as a player. He decides when to play and manages the bankroll. Your career lies in his hands.

Managing yourself as a poker player isn't just a matter of patience and discipline. You have to manage your bankroll effectively to be a good poker player.

Bankroll management requires, for example, that you only play limits where you can afford to lose. If you lose at an affordable limit, it won't hurt too much and when you do win, you will increase your bankroll nicely.

Setting a loss-limit is an essential part of managing your bankroll effectively. The term originally comes from the stock market: any time a stock falls below a set "bottom" price it is to be sold immediately to avoid any further losses.

When you buy stock you hope, of course, that the value of that stock will go up. But it can also fall, so if at some point the stock becomes too risky, you cut your losses and sell.

This principle can be applied to poker as well. Setting a loss-limit means any time you have lost a certain, maximum amount, you end the session. A No-Limit player may leave the table after losing 3 buy-ins, thereby having reached his loss-limit.

Why is a loss-limit so important?

The purpose of a loss-limit is to get you out of a situation in which you will inevitably continue to lose money. This means not holding on to a stock too long in the desperate hope that it may one day gain value.

Choosing the wrong table can put you in such a situation. Perhaps you overlooked something, you are sitting with the wrong players, or you just can't seem to hook the fish at the table. Whatever the cause, you will inevitably end up at tables where you simply can't play profitably.

There will always be a reason why your game is not working - sometimes you simply pick a table that isn't profitable. Giving yourself a loss-limit will help you get away from such a table.

Let's face it, sometimes you just have bad luck. Your play is solid, but your draws just don't come and your opponents suck out against your made hands. Tilt is lurking just around the corner.

Tilting isn't something you can simply turn off - everyone is susceptible to tilt. But you can control it by knowing what can put you on tilt and going out of your way to avoid such situations.

Some people think it's best to just keep playing. But why should you keep playing when you know you're in danger of tilting and likely to only end up losing even more? In the course of your career your tilt phases can easily cost you more than all the bad decisions put together.

You can neutralize this danger by hitting the emergency brakes when you've reached your loss-limit.

A loss-limit also helps:

... control damage when you happen to be at the wrong table - either the opponents are too good, or you just can't get your game to work.
… get you out of a situation that could lead to tilt.

It's not just the fear of losing more that should lead to setting a loss-limit. Your win rate and bankroll are plummeting due to various factors and you can put an immediate stop to that by leaving the table.

Protecting your profits with a loss-limit

Often enough you sit down at a table and win a few early pots. To protect this profit, you need to "reset" your loss-limit.

For example: A No-Limit player sets a loss-limit of 3 buy-ins, but has soon won 4 buy-ins at the table. He could now lose 7 buy-ins before reaching his original loss-limit.

The question is, does he really have to lose 5 or 6 buy-ins before he realizes that something is now going wrong? And, will he still be playing his best after having lost 5 or 6 buy-ins in a row?

Once you've made a profit it's important to reset your loss-limit. If you set a loss limit of $150 but start off by winning $100 you should set your new loss-limit to $50.

Of course you don't have to reset your loss-limit after every single pot. Once your profit has reached a significant amount, however, you should seriously consider adjusting it.

If you don't, you may easily end up losing your $100 of profit and the original $150 limit before you decide it's time to hit the emergency breaks. You will be kicking yourself for not having left the table earlier.

How should you decide on a loss-limit?

Set loss-limits for both tables and sessions. In one session you might end up at one bad table, while the others can be played profitably. If that happens, then you should leave the bad table and continue your session.

Your loss-limit for a single table will be lower than your loss-limit for a single session - just try to think back to some of your losing sessions of the past. In hindsight, at what points in time would you now say "I should have stopped there"?

Some professional players already leave a No-Limit table after losing 2 buy-ins, but don't end a session until 9 buy-ins have been lost. In practice, there are a few good rules of thumb when it comes to setting loss-limits. A good table loss-limit in Hold'em No Limit and Pot Limit is 3 buy-ins, and 5 buy-ins for a session. You may be even more conservative when using the short-stack strategy.

If you are playing SNGs, don't start any new tournaments after having lost 8 buy-ins. Your table loss-limit in a fixed limit game should be around 50 Big Bets, your session limit around 100 Big Bets.

These are rules of thumb and not carved in stone. The main point is to be conscious of cutting your losses and having the discipline to stick to the limits you set for yourself. Doing so will go a long way and help you have a long-lasting poker career.

Sticking to stop-loss limits won't make you play better poker and it won't help you win back any of your losses - it will, however, prevent you from losing excessive amounts and improve your win rate and bankroll over the long run.

Conclusion

A serious poker player is also aware of his role as his own coach and manager. The player in you might often be irresponsible or blinded by pride. He is focused on the game at hand in which he is trying to maximize current winnings, while not paying attention to the long run. At times, he might even be be willing to lose half his bankroll in an attempt to turn things around and to show everyone else how good he is.

The manager, however, has an overview of all the games you play. He isn't as concerned with winning a single pot, but rather that your bankroll will have increased at the end of the month.

Sometimes cutting your losses is the best thing you can do. You can stay and continue to get beaten - you can also admit defeat when you've had enough. Tacitus said, "He who fights and runs away, lives to fight another day; but he that is in battle slain, will never rise to fight again." You will win the money back, just not today.

Set a loss-limit the next time you head to the tables. You may even want to write it down and have it near the keyboard. It won't always be easy to stick to it, but if you can, you will save yourself a good amount of money in the long run.