Please change the FAQ on bankroll requirements.

[pzhon]

Here is the SSNL FAQ entry on bankroll requirements:

<ul type="square">
Q: What's the proper bankroll for each limit?

A: General consensus is that a player should keep at least 20 buyins for each limit he's playing. Excluding poor beginner play, bad bankroll management is the biggest reason that new players go bust. Do yourself a favor and only play in games you can afford.

Limit: $0.01/$0.02 | Needed: $40 ($100 on Stars)
Limit: $0.05/$0.10 | Needed: $200
Limit: $0.10/$0.25 | Needed: $500
Limit: $0.25/$0.50 | Needed: $1000
Limit: $0.50/$1.00 | Needed: $2000
Limit: $1.00/$2.00 | Needed: $4000
Limit: $2.00/$4.00 | Needed: $8000[/list]
This is bad.

[img]/images/graemlins/diamond.gif[/img] It should be emphasized that bankroll management is only for winning players. Losing players need a budget. Saying 'only play in games you can afford' confuses the two.

Mentioning beginners' poor play is not enough. Most experienced players lose, and many winners will lose if they move up too high, regardless of the amount of money they have in their bankroll.

[img]/images/graemlins/diamond.gif[/img] The mindless application of 20 buy-ins is wrong in both directions. The suggestion that you need $100 to play NL with a $0.02 big blind when the buy-in is 250 BB is particularly ridiculous, since the sustainable win rates are very high in these soft games, and it is much harder to lose a 250 BB buy-in than a 100 BB buy-in. The suggestion that you need a fixed number of buy-ins as you move into tougher games is dangerously wrong. The repetition of '20 buy-ins' should stop. It's like saying that it is 4:00 whenever someone asks what time it is. Sometimes it isn't far off, but that is only an accident. On 2+2, we should be able to do better.

20 buy-ins is far more conservative for a solid winning low stakes NL player than 300 BB is for a solid winning low stakes limit player. The correct analogue of the 300 BB guideline depends on your statistics, but it may be something like 10-12 buy-ins. See below.

Some people have objected that they don't feel comfortable unless they have a huge reserve. They want a security blanket, not a bankroll. Rational bankroll management is about making sure you can weather most storms, and have a low risk of ruin. For a solid winner in low stakes games, 20 buy-ins is overly conservative.

Just as the way you should play TPTK depends on many factors, the bankroll you need depends on several factors. Thankfully, it's not that complicated. The bankroll you need is c * standard deviation^2 / win rate, where c (what I call the comfort level) depends on your personal risk tolerance and ability/willingness to move down after a bad streak. Most people are happy with a value of c from 2 (aggressive) to 4(conservative). Note that this doesn't depend on the length of the sessions you play, or how many tables you play at the same time, or whether you play 6-max or full ring, or whether you buy in for 20 BB or 200 BB, except for the way that these affect your win rate and standard deviation.

If you stay at the same level without withdrawing, your risk of ruin is about e^(-2c) ~ 1/7^c.

Note the dependence on your win rate, which many people overlook in bankroll discussions. Win rates of experts are much lower in MSNL than they are in Micro NL. While 8 buy-ins may be enough to play NL $2 quite safely if you are half-decent, some winning NL $400 players (and some marginal winners at lower levels) need 40 buy-ins or more to have the same level of safety because their win rates are much lower. It is much more common to have a 10 buy-in downswing when your win rate is 4 PTBB/100 than when it is 20 PTBB/100.

For some 'typical' stats of winning SSNL players, see this thread. The survey methodology was not perfect, but the results are still quite useful.

Having overly aggressive bankroll guidelines has the obvious danger that people will expose themselves to a high risk of ruin, or to severe bankroll damage that will force them to spend a long time rebuilding. It may shake their confidence when they see downswings larger than they expected. Overly conservative bankroll guidelines are also harmful. They mean people waste more time in lower stakes games, and they provide an excuse for downswings that are strong indicators of poor play. More dangerous than either error, though, is giving a fixed answer when the answer depends on many factors.

I recommend replacing this FAQ entry with one which explains more of the rational bankroll considerations, and which uses a consensus estimate of a solid win rate at each level to determine the number of buy-ins needed for a solid winner to have a fixed risk of ruin.

[cfb1739]

[ QUOTE ]
Here is the SSNL FAQ entry on bankroll requirements:

<ul type="square">
Q: What's the proper bankroll for each limit?

A: General consensus is that a player should keep at least 20 buyins for each limit he's playing. Excluding poor beginner play, bad bankroll management is the biggest reason that new players go bust. Do yourself a favor and only play in games you can afford.

Limit: $0.01/$0.02 | Needed: $40 ($100 on Stars)
Limit: $0.05/$0.10 | Needed: $200
Limit: $0.10/$0.25 | Needed: $500
Limit: $0.25/$0.50 | Needed: $1000
Limit: $0.50/$1.00 | Needed: $2000
Limit: $1.00/$2.00 | Needed: $4000
Limit: $2.00/$4.00 | Needed: $8000[/list]
This is bad.

[img]/images/graemlins/diamond.gif[/img] It should be emphasized that bankroll management is only for winning players. Losing players need a budget. Saying 'only play in games you can afford' confuses the two.

Mentioning beginners' poor play is not enough. Most experienced players lose, and many winners will lose if they move up too high, regardless of the amount of money they have in their bankroll.

[img]/images/graemlins/diamond.gif[/img] The mindless application of 20 buy-ins is wrong in both directions. The suggestion that you need $100 to play NL with a $0.02 big blind when the buy-in is 250 BB is particularly ridiculous, since the sustainable win rates are very high in these soft games, and it is much harder to lose a 250 BB buy-in than a 100 BB buy-in. The suggestion that you need a fixed number of buy-ins as you move into tougher games is dangerously wrong. The repetition of '20 buy-ins' should stop. It's like saying that it is 4:00 whenever someone asks what time it is. Sometimes it isn't far off, but that is only an accident. On 2+2, we should be able to do better.

20 buy-ins is far more conservative for a solid winning low stakes NL player than 300 BB is for a solid winning low stakes limit player. The correct analogue of the 300 BB guideline depends on your statistics, but it may be something like 10-12 buy-ins. See below.

Some people have objected that they don't feel comfortable unless they have a huge reserve. They want a security blanket, not a bankroll. Rational bankroll management is about making sure you can weather most storms, and have a low risk of ruin. For a solid winner in low stakes games, 20 buy-ins is overly conservative.

Just as the way you should play TPTK depends on many factors, the bankroll you need depends on several factors. Thankfully, it's not that complicated. The bankroll you need is c * standard deviation^2 / win rate, where c (what I call the comfort level) depends on your personal risk tolerance and ability/willingness to move down after a bad streak. Most people are happy with a value of c from 2 (aggressive) to 4(conservative). Note that this doesn't depend on the length of the sessions you play, or how many tables you play at the same time, or whether you play 6-max or full ring, or whether you buy in for 20 BB or 200 BB, except for the way that these affect your win rate and standard deviation.

If you stay at the same level without withdrawing, your risk of ruin is about e^(-2c) ~ 1/7^c.

Note the dependence on your win rate, which many people overlook in bankroll discussions. Win rates of experts are much lower in MSNL than they are in Micro NL. While 8 buy-ins may be enough to play NL $2 quite safely if you are half-decent, some winning NL $400 players (and some marginal winners at lower levels) need 40 buy-ins or more to have the same level of safety because their win rates are much lower. It is much more common to have a 10 buy-in downswing when your win rate is 4 PTBB/100 than when it is 20 PTBB/100.

For some 'typical' stats of winning SSNL players, see this thread. The survey methodology was not perfect, but the results are still quite useful.

Having overly aggressive bankroll guidelines has the obvious danger that people will expose themselves to a high risk of ruin, or to severe bankroll damage that will force them to spend a long time rebuilding. It may shake their confidence when they see downswings larger than they expected. Overly conservative bankroll guidelines are also harmful. They mean people waste more time in lower stakes games, and they provide an excuse for downswings that are strong indicators of poor play. More dangerous than either error, though, is giving a fixed answer when the answer depends on many factors.

I recommend replacing this FAQ entry with one which explains more of the rational bankroll considerations, and which uses a consensus estimate of a solid win rate at each level to determine the number of buy-ins needed for a solid winner to have a fixed risk of ruin.

[/ QUOTE ]

Having gone through the worst downswing of my life recently, I can say that the often quoted 20 buy-ins as an adequate bankroll is a load of [censored]. If you multi-table, you need at least AT LEAST 40. That assumes that you are a winning player and don't move down.

Just my opinion.

[pzhon]

[ QUOTE ]
[ QUOTE ]

I recommend replacing this FAQ entry with one which explains more of the rational bankroll considerations, and which uses a consensus estimate of a solid win rate at each level to determine the number of buy-ins needed for a solid winner to have a fixed risk of ruin.

[/ QUOTE ]

Having gone through the worst downswing of my life recently, I can say that the often quoted 20 buy-ins as an adequate bankroll is a load of [censored]. If you multi-table, you need at least AT LEAST 40. That assumes that you are a winning player and don't move down.

Just my opinion.

[/ QUOTE ]

Multitabling hardly affects your risk of ruin beyond the extent that it affects your win rate and standard deviation. You also don't need a larger bankroll to play on a site which deals hands faster, unless this affects your win rate/100 or standard deviation/100. You get the same downswings faster, not larger downswings.

Bankrolls are not supposed to protect you from the worst downswing you could ever encounter. They are supposed to give you a low risk of ruin. If your win rate is healthy, 20 buy-ins will give you an extremely low risk of ruin even if you can't move down. E.g., if your win rate is 16 big blinds/100, and standard deviation is 80 big blinds/100, then your risk of ruin is about 1% when you have 9.2 buy-ins, and 0.1% at 13.8 buy-ins.

If you are willing to move down, you can decrease your risk of ruin even further. If you have 10 buy-ins at your current level, but will drop down to half of the stakes when you drop to 5 buy-ins, then you need to lose about 15 buy-ins to bust out.

If 20 buy-in drops were common, then this would indicate that you need a larger bankroll, and the mathematics would reflect this. However, anecdotal evidence is close to worthless. There are a lot of people, which means that some people will have hit rare occurences. Further, experienced winning players may report large downswings in tougher games than the ones covered by that FAQ entry, and it is hard to tell the difference between the story of a solid winner, and the story of a break-even or losing player who blames variance for a lack of skills. Large (10+ buy-in) downswings are not common for solid winners in soft games. Solid winners in microstakes games don't need anything close to 20 buy-ins to have a microscopic risk of ruin.

The FAQ's suggestion that you should have $100 to play for pennies is particularly absurd and misleading. It's not the end of the world if the FAQ says 2+2=3. However, if you are going to have a serious FAQ, it should be close to correct, and this entry is not.

[Dire]

FAQs like these are not meant for solid winning long term player, as a solid winning longterm player would already have a good grasp on variance and general bankroll management. Recommending 20buyins at the microstakes is good for the less experienced players FAQs like this are geared towards. It is more than they need if they were solid winning players, but they're probably not. So the FAQ already [indirectly] covers your two points, that you need less than 20buyin rolls at the microstakes if you're a solid winning player and that losing players obviously need a buffer as they will inevitibly go broke unless they improve their game.

[pzhon]

[ QUOTE ]

a solid winning longterm player would already have a good grasp on variance and general bankroll management.

[/ QUOTE ]
Usually not. What I see is that people hear nothing but "20 buy-ins," which they apply religiously and out of context. Experienced players often have misconceptions about bankroll management. It would raise the level of discussion if the FAQ were not wrong.

[ QUOTE ]

Recommending 20buyins at the microstakes is good for the less experienced players FAQs like this are geared towards.

[/ QUOTE ]
If it is right to recommend 20 buy-ins for NL $25, then it is wrong to recommend 20 buy-ins for NL $5 with a $0.02 big blind, and for NL $400. The one-size-fits-all recommendation is wrong in both directions, and suggesting that there is a uniform guideline is misleading.

If you think recommending 20 buy-ins is good to protect less experienced players, why not recommend 100 buy-ins? Or 1000? It's bad advice, it misleads people, and you lose credibility, and that is what happens now because the FAQ says the common $50 deposit is not enough to play for pennies. (I doubt any decent player has ever had a $50 downswing playing with a $0.02 big blind in the history of online poker. $100 is ridiculous.) The FAQ should be correct and it should state the context of its advice. The FAQ should say

[img]/images/graemlins/diamond.gif[/img] Bankroll management is for winning players, not for experienced players. A bankroll does not give you the skills you need to win.
[img]/images/graemlins/diamond.gif[/img] Those who play in tougher games, and those who have a lower win rate, need a larger bankroll to be safe. Not a fixed 20 buy-ins.

The FAQ should also answer the common question of whether multitabling affects your bankroll requirements.

[carnivalhobo]

its a FAQ, its supposed to answer quick questions for people who have no idea and try to play 2/4 with $962 or whatever. Stop overthinking this stuff and just play poker.

[saskaman]

Bankroll management is for winning players, not for experienced players. A bankroll does not give you the skills you need to win.
Those who play in tougher games, and those who have a lower win rate, need a larger bankroll to be safe. Not a fixed 20 buy-ins.

[saskaman]

meant to quote that...

Couldn't agree more though, pzhon. As a general rule take your worst losing streak and triple the amount of buyins you need for a bankroll at the level you play.

For instance if your worst loss has been 10 buyins then you need 30 buyins to play comfortably.

[FoldEqu1ty]

Agreed on all points.

One of the most mind-blowing things I have ever read, was Fimbulwinter asserting that he has "never had a downswing of more than 6 buyins". And he played a lot of hands at relatively high stakes afaik. Genius or no, that would be impossible in today's games imo, even as low as 100NL.

[keikiwai]

i think you have to consider how willing you are to move down

if you move down quick a 10bi roll at 200 is really many more bis