Tip #14: Bankroll Management for SNGs

Sit and Go bankroll management is essential to anyone looking to make a long term profit at the tables. While this subject lacks the glamour of poker strategy tips it is essential reading for anyone serious about profiting from the game. This article shows how easily natural variance can affect your sit and go profits, and suggests some bankroll guidelines which should keep you making money in the long run.
We can demonstrate the effects of variance with a simple example of 100 SNGs. Imagine you have just completed 100 at the $10 level and have made a profit of $200 or $2 per game – a healthy return of 20% on your investment.

Now we take just 3 of these games and reverse the outcome of a ‘coin flip’ at the bubble, those common situations when 2 over-cards face off against a pair. Instead of winning these 3 hands we imagine you lost them, instead of coming 1st, 2nd and 3rd in the 3 previous games you came 4th each time.

This represents a swing of $100 in profit, instead of $200 profit we now have $100, half of the previous ROI. By reversing just 3 hands we saw a huge effect, now adding in those times we suffer real ‘bad beats’ or run our kings into an opponents aces, and you can see how big an effect variance can have.

Because it is so easy to suffer swings we recommend that you keep at least 50 buy-ins for the level of tournament at which you play. This number can be raised to 100 for pro players who rely on poker for their income. Going lower than 50 buy-ins increases the risk of going broke in the long term, your ability to replenish your poker account is key to how flexible you can be with taking this risk.

Bankroll management is a great way of deciding when you are ready to move up levels, and indeed move back down. When you have 50 buy-ins for the next level up then take a shot – making sure you move back down if you run badly and lose several buy-ins. Conversely, losing at your current level may trigger a move-down when you go under 30 buy-ins, having the discipline to do this will give you a better chance of growing that bankroll again over time.

To summarize, sit and go bankroll management is essential for long term profits. The natural variance in poker means you will go on both hot and cold runs many times over. With strong bankroll discipline you can prevent yourself from going broke at the same time as being in the best possible position to move up levels as your profits increase.