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Old 12-30-2006, 12:14 AM
Matt Flynn Matt Flynn is offline
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Default Bankroll Definition and Recommendation for No-Limit Hold \'em

Hi all,

This debate could get interesting. I will start.


I have strong bias about the definition of bankroll. My bankroll is what keeps me in action. That is entirely money that I've earned playing poker. A lot of money flows irrevocably each month from bankroll to house funds. In addition, bankroll has loaned the house money - specifically to pay down a HELOC when the HELOC was in use. House gets the interest savings for free as part of the flow from bankroll to house. But that's a loan. If I go bust, I write a check from House the bankroll to cover the loans.

If I go poker broke, I would not take more than maybe $500 a month out of income to play poker. I would treat it just like a golf hobby. After a few months of losing I would likely quit save for the occasional small-stakes foray. Actually not quite, because several people would stake me. That's important, because I could rebuild far faster with staking.

So in return I ask what is a pro? In effect I have a partitioned financial life: working man and poker pro. Like any pro, if I lose my bankroll, I face a full rebuild. Unlike a traditional no-job-having pro, I do not risk my livelihood or have to get a job and change careers if I go poker broke.

So for me, bankroll is that money which keeps me in action plus the goodwill/respect that would get me staked. I would not borrow, so that sector's out.

For a regular poker pro, I would define bankroll as whatever keeps you from having to get a job. That's clearly whatever funds you would expend and loans you would take before getting a job. Add the goodwill/respect of backers and potential backers.

Some have mentioned the difference between liquid bankroll and illiquid / non-bankroll money. That's less interesting to me. Everything's convertible anyway, the only question is the transaction cost in time and money.

The loan question is very interesting. How much would you borrow? How much stress would that put you under? How much would you give up in acceleration of rise in limits to avoid that stress?


Does that match your definition of bankroll?



Dean asked what my bankroll recommendations were. I am not at the recommendation stage. I'm at the musing stage. Before I go into those musings, let me warn you that I'm in the conservative camp. Your average successful poker player imo underestimates variance, overestimates his advantage, and does not adjust his bankroll requirments enough for tilt and other negative tendencies.

No one can "know" what a player's variance is. EV and variance vary with every game you play - and in some cases quite widely from game to game and circumstance to circumstance. There is no mathematically correct answer to the bankroll question. We're all making guesses and assigning comfort thresholds. However, we might rationally attempt to bound variance and hence bound bankroll requirements. But not in this post.

btw, in such situations, it pays to attack the other guy's assumptions rather than present your own. Hence the paucity of discussions of bankroll requirements for no-limit.

One way to approach it is to declare you need X number of buyins for the level you are willing to drop down to once you go "broke" at the higher level. So first we have to define your willingness to move down. If you are 100% able to move down and will continue to move down to each lower level until you hit zero, then assuming you are a decently winning player and can expect to win more per 100 as you drop down (I'm making a lot of easily violated assumptions here), a hard floor of 20 buyins for the lower level should be enough unless you habitually play heads up, hyperaggressive / LAG, etc. Even then you should be ok, but you must be a winning player and not screw that up by getting in several heads up games with better players, tilting, not quiting when you lose your concentration, etc. The higher your burn rate / depletion for expenses relative to your bankroll, the higher that number of buyins should be adjusted. Never play with the rent money.

If levels double, a hard floor of 20 buyins gives you 10 buyins at each level. So you might instead choose 30 to give you 15 buyins at each level.

I suspect a player who does not tilt, always drops down, avoids negative EV situations well, and quits when playing badly will do better with 20 buyins as a hard floor than an average successful poker player would do with 30 buyins as a hard floor. So I'm encouraged to advocate 30 as a hard floor and stress repeatedly that tiltlessness, concentration, control, ability to quit, gambool aversion, and similar "soft" skills have a radical affect on bankroll requirements.

I further suspect those who do best with those soft skills will likely "like" 30 as a hard floor, while those who don't will prefer 20 as the hard floor and face order-of-magnitude greater chances of busting.


In internet terms at 1PTBB/100 and 500 hands/hour we're talking 200 hours to move up each level with the 20 buyin hard floor. Two months to double for a pro. $1-$2 to $25-$50 in less than a year if you learn quick. A year and a half for 30 buyins assuming no withdrawals and no big rushes. If you win more, you get to move up quicker.


As an aside, I'd recommend jumping up right after a big win and strongly recommend taking a few days off immediately after going level-broke at any level. They are the cheapest vacation days you will ever take.



Your turn.


Matt
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  #2  
Old 12-30-2006, 12:21 AM
Matt Flynn Matt Flynn is offline
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Default Gergey responds to defintion

In the other thread, gergery wrote:

Quote:
That match your definition of bankroll?



It's pretty close to mine. To me its all about Pain management. Bankroll is basically what i'm willing to lose before it causes me some pain. first level of pain is having to drop down in limits. that causes financial loss in forgone income, and often ego pain of playing lower stakes or doubting confidence. next level of pain maybe is getting staked or shiftin money around -- some would have to ask wife to let them shift money to poker, or move $$ from mutual funds, some would get staked. All of those have costs associated with them. next big level is life changing -- having to get job. i think it comes down to magnitude of impact, both finacially and emotionally, and its not smooth but stairstep-like.

There are limits i play that i am bankrolled for and could finanically withstand 10 or 20 buyin swings at but 1) it cuts my financial safetynet/reserve too much, and 2) where i'm unwilling to fade say a 100k+ loss emotionally. so most think of bankroll as purely financial but thats not true. I also merge all money into one account in terms of how i think about it. it spends the same and invests the same so i treat it as one and look at ROR calcs on that.

lol, yes it is tedious. its funny that so many understand exactly how often a flush draw will hit or the importance of mixing up your play yet not understand how much a sample mean can differ from population mean, why Cero's 60 hands are the wrong population to examine, and what kurtosis does to BUSTO calculations. But as they say, you make your money from others mistakes so i don't complain.

-g



Matt adds:

Definition of kurtosis:

http://en.wikipedia.org/wiki/Kurtosis
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  #3  
Old 12-30-2006, 12:26 AM
gergery gergery is offline
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Default Re: Bankroll Definition and Recommendation for No-Limit Hold \'em

[ QUOTE ]

I'd recommend jumping up right after a big win and strongly recommend taking a few days off immediately after going level-broke at any level.

[/ QUOTE ]

i find that that the euphoria of a big win often makes me overconfident, which causes me to play suboptimally for a short while. usually right up until i try and "outplay" some calling station. but i agree that aggressively moving up to take shots is a good idea (as long as your ego lets you aggressively move back down if things go badly.) Completely agree about days off after losses.

-g
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Old 12-30-2006, 03:48 AM
T-God T-God is offline
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Default Re: Bankroll Definition and Recommendation for No-Limit Hold \'em

So many words and so few I understand...

My definition of a bankroll is basically the amount of money I have online and offline that isn't invested. I would hate to have to get staked so I don't consider staking potential part of my BR. I wouldn't borrow money either. My definition is far more simple than yours I guess. Basically it's the amount of money I have.

And to gergery, I usually play better when I'm running good. I'm more willing to let go of hands when I know I'm beat since I don't feel the need to make anything up.
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  #5  
Old 12-30-2006, 05:15 AM
raptor517 raptor517 is offline
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Default Re: Bankroll Definition and Recommendation for No-Limit Hold \'em

fwiw, i dont count any money i have offline bankroll. im sure when i turn 21 i will though. for now its all bonus cash!! holla
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  #6  
Old 12-30-2006, 07:33 AM
Matt Flynn Matt Flynn is offline
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Default Reply from LearnedfromTV

LearnedfromTV sent me the following PM:

I know you are thinking about bankroll guidelines for the book, and it seems from some of your posts in that thread that you think standard br management guidelines are too risky. I thought you might be interested in hearing from the extreme nit side, plus I'd be interested in any quick thoughts you have on my situation.

I play full time. Although I have backup plans and a couple non-poker things I'll be doing in addition to playing, I would like to play full time long term (I'm 26). I have ~$60k devoted to poker, mostly won from tournaments. I'm a solid winner at 200nl online. And I play 200nl (six max). Yes, with 300 buyins. I haven't even taken a shot at 400 or higher. I've played some live 2/5, played 5/10 a couple times a while ago, but haven't since I went pro. I am thinking about taking another shot at the supposedly soft local 5/10 game, but haven't yet. When I switched to cash games a few months ago, I thought of it as "I'm rolled for 5/10, but I want to be sure I'm a winner at each level before jumping in." 100k hands later, I'm still at 200, sure I'm a winner there, fairly sure I could beat 400/600, but aware of so many leaks, still making so many mistakes, and not confident enough in my ability to distinguish bad play from bad luck to feel comfortable moving up. It might be a dumb mental block, or maybe it's appropriate caution - I'm not sure. I don't have any ego urge to play as high as possible, but I am competitive and do want to move up, plus I want to maximize my income. But I haven't figured out what will convince me I'm ready to move up.

So anyway, reading that thread with all the high stakes guys saying, "if you drop to 10K just grind 3/6" kind of blows my mind. I mean, I know the best players would have very low risk of ruin with 20-30 buyins at midstakes, but it feels to me like it's just too easy to run hot, move up every time you have x buyins, reach levels you can't beat, lose it all back, move down and then find out you don't have the safety net you thought you had because you ran hot the first time you moved through the levels and you really aren't that good. I mean, I could play 10/20, where I'm def. -EV, and justify it "I have the roll and if I lose I'll just move down" - and I bet that's the mindset of a lot of the fish in those games, even if they are trying to play well and manage their bankroll. It's hard to tell because people aren't often going to be honest about numbers on a message board, (or, err, ever) but it seems there are a lot of people who have yoyoed through the stakes in exactly this way. And I feel like people who advocate shottaking beyond a 20-30 buyin guideline are most likely to be the ones who succeeded when they took their shots. I'm trying to treat poker as a real long term endeavor, and I think the standard br management advice people state on these boards is way too likely to get people broke. I don't understand how 20-30 buyins can be enough when it is so easy to drop 10, and with the way psychology changes when losing. I can't imagine ever playing with less than 50 buyins at midstakes, and like 100 at 10/20+. On the other hand, I feel like I want to be at upper midstakes within the next year, and am trying to figure out how to approach moving up.

Apologies if this is too long, I'm sure you're busy but I thought you'd be interested in hearing from someone with the anti-balla approach, and if you have any advice, I would definitely appreciate it. Looking forward to the book!

Tom

P.S. I know of another guy, a very good tournament player, who has ~150K br and a day job, is moving to cash games, starting at 200nl, and "hoping to get to 5/10 by the end of the year." Definitely not the norm, but we are out there.


I wrote back but will not post that reply for now; He added:

Just rereading that thread and your reply to me (end of year contemplative/planning time I guess) and the bold part really sticks out to me. I think people who quote the math and only the math in this context miss that there's added variance inherent in the fact that your edge varies game to game, depending on opponents and your state of mind, full-blown tilt, subtle tilt all factoring in. You can't always play your A game. Calculate your risk of ruin from your average winrate and sd as though they are fixed and you underestimate it, by a lot I think, because your actual wr/sd varies so widely... any marginalk to decent winner is probably playing a decent number of hands in -EV situations, etc. Even for someone doing everything by the book, i.e. they move down when they should, quit when they tilt bad, it still means they'll be more likely to have to move down than they expect.

I wonder how people on standardish rolls, like 25-35 buyins at midstakes or 40-50 at high stakes can handle losing 25%+ in short periods of time. I couldn't. And right now, even as my bankroll increases I've got low absolute dollar pain thresholds, like I take a dayoff if I lose $1K. Start playing 3/6, I'd bve taking days off every third day. Standard bankroll guidelines assume your pain threshold goes up in proportion to bankroll. I don't think that's true, especially at the highest stakes.
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Old 12-30-2006, 12:55 PM
freemoney freemoney is offline
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Default Re: Bankroll Definition and Recommendation for No-Limit Hold \'em

I really hate including money you could borrow/get staked when defining a bankroll. It is a good thing to have in case things go wrong but I just think it leads to irresponsibility.
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Old 12-30-2006, 09:29 PM
DrGonzo DrGonzo is offline
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Default Re: Bankroll Definition and Recommendation for No-Limit Hold \'em

[ QUOTE ]
So in return I ask what is a pro?

[/ QUOTE ]

I'd say someone whos primary income is from poker. If you make more money from poker than your day job, you are a pro.

[ QUOTE ]

Some have mentioned the difference between liquid bankroll and illiquid / non-bankroll money. That's less interesting to me. Everything's convertible anyway, the only question is the transaction cost in time and money.


[/ QUOTE ]

If your invested money are bound for say a year, I don't see how they could be considered a part of your bankroll(?)


[ QUOTE ]

The loan question is very interesting. How much would you borrow? How much stress would that put you under? How much would you give up in acceleration of rise in limits to avoid that stress?


[/ QUOTE ]

Including money you could potentially loan in your bankroll calculations really seems like a stretch. Maybe the guy that recently was willing to lend you a large amount of cash/stake you isn't that interested after you went busto/he went busto/a hurricane blew away his house/you slept with his wife etc.


[ QUOTE ]

I suspect a player who does not tilt, always drops down, avoids negative EV situations well, and quits when playing badly will do better with 20 buyins as a hard floor than an average successful poker player would do with 30 buyins as a hard floor. So I'm encouraged to advocate 30 as a hard floor and stress repeatedly that tiltlessness, concentration, control, ability to quit, gambool aversion, and similar "soft" skills have a radical affect on bankroll requirements.


[/ QUOTE ]

Sure. That seems reasonable.
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  #9  
Old 12-31-2006, 07:17 AM
creedofhubris creedofhubris is offline
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Default Re: Bankroll Definition and Recommendation for No-Limit Hold \'em

Hi Matt:

6-max has a substantially higher variance than full ring, and headsup is even higher than 6-max. (Of course, your edge is also higher in those games, but not sufficiently so to cancel out the effect of variance in my experience.)

You may want to be advocating different ceilings for each. While I think a full ring nit could get by with 20 buyins, I think a 6-max guy might want 35 and a HU specialist 50.
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  #10  
Old 12-31-2006, 07:19 AM
raptor517 raptor517 is offline
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Default Re: Bankroll Definition and Recommendation for No-Limit Hold \'em

[ QUOTE ]
Hi Matt:

6-max has a substantially higher variance than full ring, and headsup is even higher than 6-max. (Of course, your edge is also higher in those games, but not sufficiently so to cancel out the effect of variance in my experience.)

You may want to be advocating different ceilings for each. While I think a full ring nit could get by with 20 buyins, I think a 6-max guy might want 35 and a HU specialist 50.

[/ QUOTE ]

mmm.. i disagree with some of this.. a HU specialist is also good at finding idiots to play HU where there is VERY little variance assuming they dont quit you. holla
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