Money Management
in Online Poker
I am sure there are many members here that had the unfortunate experience of losing all of the money in their online account after they managed to make a profit on their initial investment or freeroll win. You may have multiplied your investment or freeroll winnings by 500% or 1000%. This is the time when most people make the mistake of playing in tournament, S&G, or cash game that they can’t afford to play in. This usually happens when players are tired of winning a couple of dollars here and there and they want to put themselves in a position where they can win more money. Money management is an important part of being a successful recreational or professional poker player. Here are some tips that could help you.
Avoid $1.00 S&G Games.
These tournaments have the highest rakes based on percentages. (20% at PokerStars and 25% at Fulltilt) 20% or 25% is too much to pay when you factor in your potential for profits in a 9, 18, 27, 45, 90 player S&G game. Most people say, “Well it’s only 20₵ / 25₵.” You shouldn’t be thinking about the small fee. You should be thinking about the percentage of the fee. You might not have problem with the idea of paying 20₵ to play a $1.00 S&G game, but I am sure that you would not want to pay $20 to play a $100 S&G game.
Never Risk More Than 5% Of Your Money On A Game
If you want to enter a $5.50 tournament or S&G game, you should have a minimum of $110 in your account. The 5% rule also applies to cash games. The only exception to the 5% rule is when you are entering tournaments with entree fees from 10₵ to $1.10. A 10% rule should apply here.
If you’re a good player and you follow these rules, you should never go broke. There are other things that you can do to avoid going broke, like never saying no to freerolls, (even if you spend most of the time sitting out in the tournament) and using your frequent player points wisely.
Avoid $1.00 S&G Games.
These tournaments have the highest rakes based on percentages. (20% at PokerStars and 25% at Fulltilt) 20% or 25% is too much to pay when you factor in your potential for profits in a 9, 18, 27, 45, 90 player S&G game. Most people say, “Well it’s only 20₵ / 25₵.” You shouldn’t be thinking about the small fee. You should be thinking about the percentage of the fee. You might not have problem with the idea of paying 20₵ to play a $1.00 S&G game, but I am sure that you would not want to pay $20 to play a $100 S&G game.
Never Risk More Than 5% Of Your Money On A Game
If you want to enter a $5.50 tournament or S&G game, you should have a minimum of $110 in your account. The 5% rule also applies to cash games. The only exception to the 5% rule is when you are entering tournaments with entree fees from 10₵ to $1.10. A 10% rule should apply here.
If you’re a good player and you follow these rules, you should never go broke. There are other things that you can do to avoid going broke, like never saying no to freerolls, (even if you spend most of the time sitting out in the tournament) and using your frequent player points wisely.
Comments
I felt bad about entering it, knowing it would not profit me as much in the long run because the rake is huge. Luckily I won it, but I won't be entering that again.
Maybe the rake is crazy (well it is) but it can be fun, once in a while, to play those tournaments.
might only be (somewhat) applicable for NL (in terms of max buyins), but I don't think this applies to limit at all. You should be thinking in terms of bets, not stack size (the only thing short stacking in limit can do is letting you minimize your post flop decision making, since much of your stack will be committed preflop and on the flop). This of course also tends to reduce implied odds (but also limits your reverse implied odds as well).
Ie by your 5% math, buying in for $50 with a $1000 BR at a $5-10 game would be OK (this is not adviseable). But buying in for the same $50 at a .50-1 game with a $300 BR would be bad (I think this is fairly sane).
Not to mention how does multitabling affect how much you're willing to put in play? Ie if you're playing 4 NL games at once, does it matter that you have 4x the amount of money in play? IMO, it doesn't matter, the swings simply amount to variance (the fact the hands are being played at the same time shouldn't matter). The obvious exception of course is if you're prone to tilt badly (and for prolonged periods), becauase this can certainly be bad when you're playing more hands/hr.
In the end, to a point this simply boils down to risk tolerances for a player. Can a player start a BR playing with 100BB and not go bust? Sure, as long as he realizes that he "might" go bust through no real fault of his own (other than having an insufficient BR). Can a winning player have a BR of 1000BB and still go bust? Sure, it's possible, but it's probably of a low enough probability that most people don't really care.
So, in the end, if you care about not busting, you want a bigger BR. If you you're comfortable with variance, and don't really care if you have to reload...by all means, do what you want.
I agree with what you wrote but some of your comments were obvious. Anyone with any common sense is not going to go to a $5 - $10 table with $50. I think a player should go to a table with a minimum of 100× the BB. 500× would be even better, but I it is still wise to follow the 5% rule. I should also mention that I stopped playing cash games a long time ago. I would compare it to day trading. It is just too risky for me. I used my 5% rule when I was playing and I never went broke. I usually played 7 card stud and occasionally I would play no limit holdem. I hate limt holdem because it is impossible to bluff or scare a player away from a hand. And as for your comment about playing 4 tables at the same time, risking 20% of your money at 1 no limit table is not the same thing as risking 20% of your money at 4 tables.
I agree, the 1$ SNGs do have a higher rake in percentage but I think for a player who is on a small roll, they are very equitable games.
The rake is actually not 20 percent. It's 16.7ish. ($0.20/$1.20=0.166666)
I think the larger field tourneys are more equitable because in reflection of the buy-in, you should be playing against the worst players on the internet on a 1$ SNG. In a 5 table tourney, you will plenty of opportunity to win pots that will significantly affect your chipstack status at almost every stage of the tourney. Its pretty bad. You can definitely get away with playing ABC. And if you're not beating 1$ SNGs, quit poker.
You’re right. Disregard the comments that I made about 45 and 90 player S&G. I just choose not to play them whenever I can. I do play 45 player - $1.20 S&G occasionally, but that is only when I don’t have the option of entering a $1.10 tournament. But I stand by the comments that I made about the other $1.20 S&G, especially the 9 player games. You really have to finish in 2nd and 1st place on a regular basis to make a profit. The 3rd and 4th place finishes are practically useless when you factor in your losses and the extra 10₵ fee. I made the mistake of playing a lot of $1.20 - 9 player S&G games when I started playing poker on the net. I had a lot of 2nd and 3rd place finishes and one 1st place finish. I stopped playing them when I realized that I had played 50 games and I only made $6.00. I was upset about the fact that I would have made an extra $5 if I was being charged the standard 10% rake.
By the way, 20₵ is 16.7% out of $1.20, but the rake is 20% out of $1.00. It just depends on the way that you want to think about.
And I can say for certain that if you assume 20 cents out of 1.20 is 20 percent, the math for calculate how much equity you get out of a tournament will be skewed.