Are you making the biggest casino mistake? No, we’re not talking about standing when you should hit at the blackjack tables or playing Big 6 or 8 in craps. We’re talking about how much money you bring to the table. We’re talking about bankroll management.
Many novice players jump right onto the tables and play with their full bankroll. It’s understandable. They see heaps of cash in their head and they assume that othe more cash they put up, the more they will win. Sadly, it’s not a great idea and should be avoided. But it involves more than just not spending money you can’t afford. Read on for the whole deal.
Smart Bankroll Management
Bankroll management, or BRM, is one of the most important aspects of gambling, online or live. It means that a player allocates certain limits to avoid losing all their bankroll during a losing streak, which is to be expected at times.
Setting aside a specific amount of cash to play with is called “playing within your bankroll”. Playing at higher limits, in which there is a high risk of losing, is called “playing out of your bankroll”.
To put it simply, practicing smart bankroll management will prevent you from going broke. Without BRM skills, even the best players in the world, would at some point, lose everything. The point is that you don’t just have to know how to play the game, but also be able to have an understanding of how to go into the game and that begins with bankroll management. Here are a few tips to get you started.
Set Aside Money for Gambling
The first rule, perhaps even the golden rule, of bankroll management is to establish a fund strictly for your gambling. This is your bankroll and should be money that you can afford to use, and potentially lose, on gambling. For example, if you have a $3,000 paycheck every month, but $2,000 of it is for bills and expenditures, you do not have a $3,000 bankroll. You have a $1,000 bankroll. Once you have determined what you can afford to be in your bankroll, you can decide the stakes for which you will play.
Don’t Gamble What You Cannot Afford to Lose
This is fairly straight forward, if you have to take money out of the kid’s college fund or skip out on paying your utility bills to gamble, you should wait until you do have money to put into roll bankroll. The reason for this is because betting what you cannot afford to lose can lead you to anxious or ‘less than prime’ playing because you are trying to prevent losses. If you can’t afford to lose, take a step back and wait until you can.
Managing Your Funds Better
Once you have established your allocated bankroll, you’re ready to take a seat at the tables; the first step is to determine how much you can realistically wager. Without getting into too much detail, here is a breakdown of the primary systems players use to manage their funds:
A popular system which helps players to control stakes. It is a system which carries a high risk of going broke, but at the same time, a good option to win. The principal is simple. if you lose, you double your stakes, if you win you start again at your beginning stake. The logic here is that eventually you will win.
The Kelly Criteria
Used by professionals, this formula basically says that if you can determine an almost correct probability for an outcome, the formula will determine the exact amount of your funds that you should bet. Your game progress increases when winning, and decreases when losing. The stakes are decided by a percentage of the size of your funds. Using this form of bank management, the risk of going broke is minimal. The formula is as follows:
- 1. Multiply the odds of the event by the probability of winning.
- 2. Subtract the probability of losing from the number obtained in the first step.
- 3. Take the number obtained in the second step and divide it by the odds.
Stop Loss Technique
This method is specifically for cash game players. It’s pretty straightforward. Set a loss amount that you are willing to accept for an entire session. If you lose that, you quit.
The Ferguson Rules
This one is used by poker champion Chris Ferguson, so you know it’s probably one you can count on. Here’s what’s involves:
- • Never ever get into a cash game where the buy in is more than 5% of the entire bankroll that you have.
- • Don’t join a multi-table tournament where the buy in is higher than 2% of your current bankroll.
- • If you have won at a cash game and the money you have at the table is more than the 10% of your bankroll, cash out when the blind reaches you.
Don’t make Large Bets and Lose it All
If you can afford to have a weekly $1000 bankroll, losing it on a large bet may not be that big of a deal. However, if losing it means that you will have to take a month off to recuperate your gambling funds, you may want to be more cautious with what you have. Start off small and see what happens. You never know if you’re about to get on board with a “streak of luck”.
Understand the Role of Luck and Strategy
In any gambling, there are two roles, luck and strategy. Luck will be a big factor in determining whether or not you win or lose. Getting lucky is most common in games with a high house edge like slots or roulette. The casino will win in the long run, but there is still a probability for players like you to win.
In games based upon skill, like blackjack or poker, the luck factor exists, but it is important to understand the strategy for these games. When you do, you will move forward to bigger and better things.
In short, luck determines the cards you’re dealt. But strategy determines how you play them.
Just like in any road to success, there are no shortcuts. Managing, and preserving, a bankroll will take time, but it can be done especially when you are confident you can conquer and overcome the game.