Bankroll Management & Kelly Criterion

💰 Why Bankroll Management Matters

In poker, skill determines how much you win; bankroll management determines how long you can play.

Even world-class players face 20-30 buy-in downswings. Good bankroll management:

✅ Survives losing streaks | ✅ Captures opportunities to move up | ✅ Keeps your mindset stable | ✅ Ensures long-term profit

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📊 Core Concept: Buy-ins

A buy-in is the standard amount for one session at a given stake.

Stake	Blinds	Standard Buy-in
NL2	$0.01/$0.02	$2
NL5	$0.02/$0.05	$5
NL10	$0.05/$0.10	$10
NL25	$0.10/$0.25	$25
NL50	$0.25/$0.50	$50
NL100	$0.50/$1.00	$100

💡 Standard recommendation: Always buy in for 100 big blinds.

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🛡️ Conservative (Recommended for Beginners)

Requirement: 50-100 buy-ins

Stake	Required Bankroll
NL10	$500 - $1,000
NL25	$1,250 - $2,500
NL50	$2,500 - $5,000

✅ Very low risk of ruin (< 1%) | ✅ Low mental stress | ✅ Ideal for learning

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⚖️ Balanced (Most Players)

Requirement: 30-50 buy-ins

This is the sweet spot that most pros recommend — controls risk while maintaining reasonable efficiency.

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📈 Aggressive (Experienced Only)

Requirement: 20-30 buy-ins

⚠️ Higher ruin risk (5-10%) | ⚠️ Requires iron discipline | ⚠️ Only for proven winners

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🧮 The Kelly Criterion

The Kelly Criterion determines optimal bet sizing when you have an edge.

**f\* = (bp - q) / b** where b = odds, p = win probability, q = 1-p

For Poker: Use Half-Kelly

Since poker variance is massive, we use Half-Kelly (multiply by 0.5) or Quarter-Kelly (0.25):

Recommended buy-ins = Full Kelly result × 0.25-0.5

Example: NL10 with 5BB/100 win rate → Kelly suggests ~11 buy-ins → Half-Kelly = ~22 buy-ins → Add safety → 30 buy-ins recommended

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📋 The 5 Golden Rules

🎯 Rule 1: Three-Tier System

Tier	Amount	Purpose
Active	30 buy-ins	Current stake
Buffer	~20 buy-ins	Move up/down zone
Reserve	Emergency fund	Never touched

📉 Rule 2: Mandatory Downgrades

Move up when: bankroll ≥ target stake × 30 buy-ins

Move down when: bankroll ≤ current stake × 20 buy-ins

📈 Rule 3: Gradual Upgrades

Test new stake with 10-20% of bankroll

Gather at least 5,000 hands of data

Evaluate: positive win rate? Mental game stable?

Full upgrade if criteria met

💸 Rule 4: Withdrawal Strategy

When bankroll reaches current stake × 50 buy-ins:

Withdraw 50% of the excess

Keep 50% for moving up or variance buffer

🎲 Rule 5: Variance Preparedness

Hands Played	Possible Downswing
10,000	-20 buy-ins
50,000	-30 buy-ins
100,000	-40 buy-ins

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🏆 Tournament Bankroll

Format	Buy-ins Needed	Example
Cash Games	30-50	NL10 needs $300-500
SNG	50-100	$10 SNG needs $500-1,000
MTT	100-200	$10 MTT needs $1,000-2,000

📊 Why MTTs need more: ROI typically 5-15%, variance is extreme, you need massive sample sizes

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⚠️ Common Mistakes

❌ Moving up with insufficient funds — 10 buy-ins at NL50? You'll go broke on normal variance

❌ Refusing to move down — "I'll win it back" is how bankrolls die

❌ No data tracking — You can't manage what you don't measure

❌ Mixing life money and poker money — Never play with rent money

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🎯 Action Checklist

☐ Calculate your total bankroll

☐ Confirm your current stake

☐ Check buy-in count against recommendations

☐ Set upgrade/downgrade thresholds

☐ Start tracking detailed data

☐ Set up a withdrawal plan

☐ Review and adjust monthly

💡 "The goal of bankroll management is not to maximize profit — it's to minimize risk of ruin."