‘Ask a Pro’ #2 – Hollywood Dave Answers Last Week’s Question
Thursday, December 4, 2008 - smokin_aces
Last week we were treated to an excellent answer by Annie Duke.
This week, we had some great questions to choose from. Check the comments of the ‘Ask a Pro week 2′ post to see the questions.
The winner for this week was Phil K with this great question.
“I know some pros have different opinions on the proper way to manage your bankroll. I often find I’m tempted to jump into higher stakes play before it’s wise based on my bankroll. I crave the big winfalls. Can you recommend a formula for playing wise according to your bankroll?
Here is Hollywood Dave’s sage advice.
“You ready for the big time, huh? Rock on — sooner or later, ya gotta step your game up! But beware — many a bankroll has been demolished by jumping stakes before you’re ready. No matter how much mad skill you possess, even the best players in the world have gone broke not obeying proper money management techniques. For the purposes of this question, I’ll assume you’re talking about poker, but for all kinds of sick detail on blackjack money management, pick up a copy of my book: “Hollywood Blackjack: An Uncensored Guide to Doing It Like a Pro.”
I know, I know — we all have days, weeks, even months where it seems we can do nothing wrong, and you crush table after table, tourney after sng. Well guess what — no matter how much you pwn the games, its not all you! A lot of it has to do with positive variance. When you run good, you run good, baby! But unfortunately, no amount of world-class skill can stop the streaks of negative variance that are built into the equation as well.
So in the pursuit of finding a rule of thumb to use when increasing stakes, its important to realize that while you should never play a game you aren’t skilled enough for, its even MORE important to never play a game you aren’t BANKROLLED for. Which means being able to withstand the INEVITABLE streak of 5-10 losing sessions you will experience. And if you can’t survive that, you just aren’t gonna make it as a professional gambler.
Here’s the nuts and bolts: Since I came from the mathematically conservative world of blackjack, I never put more than 5% of my bankroll at risk at any given time. Yup, you read that right: 5%. That means if you have $10,000 in your gambling bankroll (and it goes without saying that this gambling BR is money that is completely SEPARATE from money you need for bills, food, and other responsibilities), you aren’t walking in to a casino (or buying in online) for more than $500 at any given time — INCLUDING rebuys/reloads.
If you’ve only got $1000, then the number is lower — no more than 50 bucks a pop. Which means, buying in to a no limit game for 50 big blinds (or fixed game at 25 BB), you shouldn’t be playing higher than .50/1 NL (1/2 fixed). A $5000 BR means no more than $250 at a time, which is a 2/4 no limit game (5/10 fixed). For tournaments and sngs, my limits are even lower: I keep to about 2-3% here, so a $1000 bankroll means I’m only playing sngs/tourneys in the $25 range.
While these limits may seem excessively low, they do two things: 1. make sure you virtually never go broke!! and 2. by the time you EARN your way up to the next level of play, you possess the kind of solid discipline it takes to STAY there. But, as inevitably can happen, several losing sessions can force you down into lower stakes games. That’s life; at least you’re still in the game, self-sufficient, and not mooching buy-ins off your friends!
In my early years gambling, I wiped myself out several times until I finally hit a big enough score to where I could keep the ball rolling. But even after years of high-stakes gamblin’ all over the world, earlier this year I hit the worst negative variance of my career. It seemed that no matter what I did, I lost money every single day I played for over THREE MONTHS STRAIGHT! Aside from the psychological damage (where I had to really examine whether I had a leak in my game or if i was just getting hosed by the cards that hard), I flushed 3/4 of my BR down the toilet in 3 months. Sick!
Thank god for money management. I switched gears, hunkered down, and ground away at lower stakes this entire year until I built myself back up, slowly but surely. It was very humbling stepping down from 50/100 fixed limit games all the way down to 5/10 (and all the way back down to 2/4 pot limit), but after months of grinding, I’m finally back to where I was at the beginning of the year. While on the surface it might look like I wasted all of 2008 paying for the sick negative variance that started it off, the true lesson here is that I SURVIVED, baby! And I’m back!
Rock on, good luck, and stay strong. Come visit me at my site, www.HollywoodDave.com; for more!
-hd.
Make sure to check tomorrow’s “Ask a Pro” post to find out which Ultimate Bet Pro will be answering one of your questions next week. Who could it be? Take a guess!
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Tags: Ask A Pro, Hollywood Dave
December 19th, 2008 at 5:32 pm
[...] poker. Whether it’s Annie Duke giving pointers for borderline hands in a poker tournament, HollywoodDave lending bankroll management insights, Scott Ian giving his well learned advice for fast tracking poker skill advancement, Shawn Rice [...]
December 31st, 2008 at 3:01 pm
[...] I answered a question awhile back for a player on UB about bankroll management, a lesson I had beaten into my head in 2008. Although I’ve come outta the mathematically-savvy background of professional blackjack, where BR mgmt goes hand in hand with skilled play, over the past few years of playing poker I had allowed some of those caveats to slip away, and found myself not heeding my own advice last winter. [...]