Sooner or later some less skilled player will get lucky. Over the last year, I've watched Mike play a lot of poker and he does take some terrible beats, but he is a loser because he manages his bankroll poorly and spends much of his time about eight degrees off center. Instead of playing within their ‘roll these players risk everything at the highest levels, where the pay-offs are big but losses can be devastating. (It might cause weaker men to turn to drugs.) Both Ungar and Mike often parlay/ed their skill into loans that keep them in the big game, but then have to pay off the backers before their bankroll is truly theirs. These guys exhibit one serious losing trait, poor bankroll management.
So how do we avoid the trap? Bigger bankrolls relative to our level of play is number 1. If we are risking a large percentage of our ‘roll when we sit in a game, we are risking our livelihood. Our ‘roll is our capital. We use it to make money. The smaller our ‘roll the less money we make. We should avoid risks that threaten it. I'm not suggesting that you shouldn't take a shot at a bigger game occasionally if it appears good, but it should be the exception not a common practice. If you risk more than 20% of your bankroll in a game and lose, it will take a long time to rebuild at your normal limits. This often motivates players to take another "stab" at the bigger game and lose another 20%. It isn't a spiral staircase going up. The only real solution is to be a grinder. Grind it out at lower levels until your bankroll is big enough to sustain several bad sessions at higher levels. Develop a plan and stick to it. Here is my suggestion, 400 big bets:
| Big Bet | Drop Down | Minimum | Maximum | Move Up | Cash Out | Amount |
| $ 0.04 | $ 4 | $ 8 | $ 16 | $ 20 | $ 24 | $ 8 |
| $ 0.10 | $ 10 | $ 20 | $ 40 | $ 100 | $ 60 | $ 20 |
| $ 0.50 | $ 50 | $ 100 | $ 200 | $ 200 | $ 300 | $ 100 |
| $ 1.00 | $ 100 | $ 200 | $ 400 | $ 400 | $ 600 | $ 200 |
| $ 2.00 | $ 200 | $ 400 | $ 800 | $ 800 | $ 1,200 | $ 400 |
| $ 4.00 | $ 400 | $ 800 | $ 1,600 | $ 1,200 | $ 2,400 | $ 800 |
| $ 6.00 | $ 600 | $ 1,200 | $ 2,400 | $ 2,000 | $ 3,600 | $ 1,200 |
| $ 10.00 | $ 1,000 | $ 2,000 | $ 4,000 | $ 4,000 | $ 6,000 | $ 2,000 |
| $ 20.00 | $ 2,000 | $ 4,000 | $ 8,000 | $ 6,000 | $ 12,000 | $ 4,000 |
| $ 30.00 | $ 3,000 | $ 6,000 | $ 12,000 | $ 10,000 | $ 18,000 | $ 6,000 |
There is another leak in your bankroll that most people often overlook, making withdrawals. Note the cash-out point on the chart above. It is at 150% of the maximum and above the amount required to move up. When you take money out early to buy a plasma TV, or pay for that trip to Las Vegas, it reduces the earning power of your bankroll. I know cash outs should be the ultimate goal of every poker player, but don't do it on a whim. Leave the money in your bankroll except in an absolute emergency.
For No Limit and Tournament play the bankroll calculations are significantly different. The best way of addressing it is using something called the Kelly Criterion. It may have a lot of short comings but it still gives a good, if liberal, estimate. Basically if you have twice the skill of all your opponents at a 10 player hold 'em table, (You don't) you can risk 9.8% of your bankroll. So your bankroll should equal 10 times the maximum buy-in.
If your skill is 1.5 that of your opponents, 4.4% of your ‘roll should be your maximum buy-in. In most games the difference in skill levels is only 1.1 or maybe 1.2 difference. This suggests that you should only be risking 1.5-2% of your bankroll on any single proposition. Since your total buy-in is at risk in a No Limit or Tournament game, I suggest; 50 maximum buy-ins.
Note: I should add that the differences in player skill levels are really quite small. Only the very best in the world would have a skill level twice that of an average table of competent players. Thank goodness there are always a number of sub-par players in most games to make the games worthwhile.
So what is the conclusion? Keep your bankroll large relative to your normal game. The cash in your bankroll is your capital. Keep it separate from your normal spending money. You might remember this article, Bankroll Management. It gives you a good estimate on how large a bankroll should be to turn "pro." If you mingle your money with your normal spending money, spending money and putting in money as needed, you're not really serious. You are simply a recreational player that usually wins (or loses.) Finally, Grind it out.