No matter how quick you are when it comes to calculating pot odds and no matter how sharp you are when it comes to being able to distinguish between an honest bet and a stone cold bluff, over the course of time your skills at the felt aren’t going to mean a thing if you haven’t mastered the art of effective bankroll management.

When we talk about bankroll management (BRM), we’re talking about a system used to protect the funds an individual allocates to poker by never risking a large percentage of this money at any one time.

Bankroll ManagementSure, you can throw 50 bucks onto your favourite online poker site, whack it all on one table and move up levels every time you double up. That’d be a bit of fun, and hey – you might even get lucky. But in the end, no matter how lucky you get, you’re eventually going to lose that money, and it doesn’t make a bit of difference how good at poker you are. The reason? Variance.

No one, not even the pros, can escape variance. Variance is the term used to describe the inevitable ups and downs of poker.

On any given day you might see an opponent at your table continually making simple mistakes, poor reads or just generally playing bad poker and somehow getting paid off for it. They’re calling ridiculous bets on no-hope draws and hitting every time. Similarly, on the same day you may not make a single wrong move and yet end up gradually losing every chip in front of you.

You’ve probably heard poker players talk about ‘running hot’ or being cold carded. These are just a couple of terms used to describe the way in which luck can significantly favour or completely evade a player for a particular session, day or even over a matter of weeks!

Over the long run, however, the player who was calling your $100 turn bet to chase his 3-high four card flush, is going to lose. Similarly, if you continue to play perfect poker, over the course of time you are going to profit – and profit well.

What makes good BRM so important is that unless you master the art – you may not have enough money to see out the period of time required to account for variance.

If you bought into a $2/$4 game for $500 and found yourself all in pre-flop with Ac As against an opponent’s Ad As and end up losing your stack to a ridiculous straight – that’s just bad luck. If that $500 was your entire bankroll… well, that’s entirely your fault. It doesn’t matter that you didn’t do a thing wrong, your money is still gone and there’s nothing you can do to get it back.

If you had bought into a 10c/25c game for $25 and lost your stack under same circumstances sure, it would be frustrating, but over the long run it wouldn’t hurt you at all – you’d have only lost 1/20th of your entire bankroll and you’d still have 19 more buy-ins at that level. Over the course of time through good play you’d not only make it back, but you’d start to turn a profit. Eventually you’d turn your $500 into $1000, at which point you could step up to a 25c/50c game.

Sure, a NL25 game isn’t going to get your adrenaline pumping like a NL400 game, but then again – do you really want your heart to be pumping a million miles an hour when you find your Ac As all in against Qs Jh on a Ts Kc 4s board for your entire bankroll?

Effective BRM allows us to give ourselves the best possible opportunity to maximize profit whilst minimizing losses.

You can learn how to apply effective bankroll management in the following article, which I will publish on Poker For Free somewhere tomorrow morning.