Understanding bankroll is one of the most important lessons a new poker player can learn. If you are completely new to poker then we will start with the very basics and simply define bankroll:

 

Your poker bankroll is the total amount of money you are willing to (or have available to) put at risk for playing poker.

 

Your bankroll could come in many different forms. You might deposit $1,000 to Full Tilt Poker and say "that is all I am willing to lose, and I will never play poker again if I lose this amount" in which case your bankroll is a static $1,000. Sometimes your bankroll can be dynamic. Lets say for instance you have a regular job and you are willing to put more money into poker every time you get paid, then your bankroll is more flexible. The distinction is that with a static one time bankroll, it is much more important to play within the means of that bankroll. When your bankroll can constantly be refilled, you have more freedom in what limits you play. Rather, you are not as restricted by your bankroll. There is another important term that is crucial to understanding bankroll and that is called risk or ruin or ROR. Risk of ruin is defined as the risk you are taking that you will expend all your bankroll and not have any money left. Here are a few examples:

 

Example one: You have $500 dollars and you decide to play $30-$60 Texas Hold'em. Your risk of ruin would be very high in that you only have enough money to cover about eight $60 bets. You will go broke very quickly if you regularly play $30-$60 with only $500.

 

Example two: You have $1000 dollars and you decide to play $1-$2 Texas Hold'em. Your risk or ruin would be very low in that you would have to run into some of the worst luck known to man to exhaust $1,000 dollars while playing $1-$2 Texas Hold'em. No amount of money is safe when your playing poker, but you can set yourself up to be in the best position to win, and the lowest chance of going broke.

 

The nice thing about bankroll management is that there are good guidelines to follow that will help you manage your money effectively and keep your risk or ruin as low as possible. There is one more term to define before we get into the guidelines and that is stake. Your stake is how much money you bring to the table for one particular session of poker. Your stake money comes from your bankroll. You could look at like your bankroll is full of individual stakes for the various sessions of poker you will play over time. A general rule of thumb is that you want to bring a steak equal to 25 times the big bet anytime you sit down to play cards. So that means if you want to sit down and play a game of $2-$4 Texas Hold'em, it would be best to sit down with a minimum of $100 dollars. Likewise, if you wanted to play $30-$60 Texas Hold'em, you are going to want to sit down with no less than $1,800 dollars.

 

Now lets take this discussion a step further and talk about how much you should have in your bankroll. Although it would not be wise to suggest that this is a one size fits all number, your bankroll should be a minimun of 300 times the big bet for the limit you are playing. So in our above example if you are playing $2-$4 Texas Hold'em then it would be wise to have a total bankroll of at least $1,200 dollars. Now keep in mind that as you go up in limits the swings you encounter can get bigger and bigger, so it is certainly safe to assume that if you are going to be playing $100-$200 Texas Hold'em, that you might want to have 400 to 500 big bets in your bankroll! Here are some other things to keep in mind about your bankroll:

 

-Games like five card draw and seven card stud usually don't require as big of a bankroll or stake as Texas Hold'em

-Pot limit and No limit games are completely different animals, you could go ten buy ins or more before you run into a winning session, PREPARE ACCORDINGLY!