Money Management for Online Players

Oh, good. Another article on the riveting subject of money management! What could be more mind-numbingly boring than this?

I'll admit, I found articles on the subject boring once too. Then I went through four figures of bankroll in a short period of time, and had to make a deposit into my online account for the first time in years. This is money that my family had budgeting to do other things with, and I am using it to feed my online poker urges.

Sound familiar? Well, if you've managed to avoid this depressing place in your poker life, I congratulate you. But most of us have not, and so most of us can benefit from a couple of rules surrounding money management. If, like me, you never want to have to make another deposit, read on.

If you play most of your poker online, you need to think differently about money management than players in either home games and brick and mortar card rooms. The online game is a simply a different animal than in those other environments. There are two reasons for this.

1. The online game moves much faster. Without the need to shuffle the deck between hands, or sell chips to players, or wait for players to act, online card rooms have the ability to deal anywhere from three to five times the numbers of hands to you per hour than live dealers. This means that the blinds come around three to five times as quickly, and your chips are at risk three to five times as often. All of this creates greater fluctuations of your bankroll than for live games.

Those of you with some education in Mathematics might be asking, "but wouldn't the large numbers of hands actually reduce the variance, rather than increase it? After all, isn't there less variance in large numbers than small numbers?" You'd think so, but you'd be wrong.

The increased hand count will stabilize the overall cards that you receive in a given amount of time. But the short-term variance still exists; it's just squeezed into a smaller time frame. And Mathematics does not control those times when you're just not playing well. In a rapid-fire online session, when you're not at the top of your game, you stand to lose much more than when you're playing live.

2. The second reason why online games require different money management skills is that most players don't play their best poker online. We tend to try more bluffs, call more bets with marginal hands, and chase more draws with thin odds when we're online than when we are sitting with live players. I don't know the reason; it's probably different for everybody. Maybe it is out of boredom, maybe it is because we are usually doing other things when playing online, maybe because betting and calling requires clicking our mouse, rather than throwing in chips. Maybe it is because we don't think that online players are as good as live players (even though we suspect that they are the exact same people). For whatever reasons, people tend to play a great deal more loosely online than in live games.

Again, if you've managed to avoid this trap, more power to you. But most of us haven't, and so we've got to watch our bankroll more closely. Here are two ways to do so.

1. Make a promise to yourself that you will always follow the Ten Percent Rule. Promise yourself that you will not lose more than 10% of your bankroll in the same day. And when you sit down to a game, don't buy in for more chips than represents 10% of you total bankroll. If you make money, great. In the next session, your bankroll will be slightly larger, and you can buy in for more. If you keep winning, then you will be able to risk more, and keep winning by higher and higher amounts.

But if you are losing, either from sheer bad luck or from playing less than your best game, you won't be crippled in a single session. The worst thing that can possibly happen if you follow the Ten Percent Rule is that you'll have a short, losing session, and have to put poker aside until the next day. And when you're losing, isn't that the best thing to do anyway?

2. So if you're only going to risk 10% of your bank in a single session, what games can you play in? Well, you'll probably start a great deal lower than you're used to. If you have $1000 in the bank, you might be playing $5-$10 or $10-$20 limit, or maybe a $300 No Limit game, or a $200 tournament. Not anymore. If your bankroll is $1000, then you have $100 to play with, which means that you are playing $2-$4 or $3-$6, or buying into a $100 cash game or tournament. Think in terms of how much you can risk today, not how much you have total. And only play at the level your bankroll can realistically afford.

The advantage of this is that you should never run out of bankroll. If you keep losing, you will simply play for smaller and small stakes until you find a game that you can beat. Then, you can start winning again, and earn enough to get back to the levels at which you belong.

I know, I know. It isn't a lot of fun playing against $2-$4 players when you've been playing in $10-$20 games. But be honest. If you only had $1000 in your account, should you really be sitting at a $10-$20 table, where half of your bankroll is at risk in a single session? At $10-$20, it will usually take you about $80-$100 to see a hand to the river, which means that it only takes four or five losing showdowns to lose $400. Think about that. Four or five bad beats, four or five times when you are outkicked, or your trips lose to bigger set. Is such a thing possible? You bet. And when you're playing online, it is not only possible, but it can happen three to five times faster.

Money management is boring stuff. But it's good poker. Even for the best players, poker is a risky endeavor, and you have to protect your downside at all times. By holding back 90% of your bankroll, and only playing in games where you can buy in with the remaining 10%, you will be doing that. And when you accumulate enough to get back to the $10-$20 games, you'll play them even better because you'll be motivated to stay there.

© The Poker Forum.com, all rights reserved