Bankroll Management IV - My Bankroll Requirements

And here we are again, and this time I've brought along my old PokerOffice stats. For those of you unfamiliar with the program, it is basically a tracking software that keeps track of your exact statistics (as well as some information on your opponents) in real time as you play. I've tried a number of different calculators and tracking software, and I've yet to come across anything that has as much data available. This post will give you an idea of how the data from PokerOffice can be used, but won't provide you with a view of all the features it provides. However, as my project progresses, I'll be using PokerOffice to keep track of my stats, so you'll be seeing a lot of it if you're reading this, I promise.

The screen from PokerOffice we'll be dealing with to calculate my bankroll requirements is the screen entitled "Level Performance Summary." I'll be looking at my last 11500 hands of $5 max NL Hold Em, and calculating my bankroll based on the numbers that I've posted. Below is a screenshot of this view from PokerOffice:



I've blocked out some of the other information about my playing at other limits, as it's not relevant for this posting. This is the data for my last 11,000+ hands. Now we will look at this data, and apply it to Malmuth's bankroll formula that we discussed a few days ago:

B = (1.64sigma)^2/4u
where:
u is the hourly win rate
sigma is the standard deviation per hour
B is your required bankroll

B = (1.64*2.07)^2/4*0.24 = 12.005

In other words, I would only need $12 to compete at this level according to Malmuth's formula. However, I would need at least $20 to buy in with the minimum $1 and have it be 5% or less than my bankroll. This means that, as long as I am following the 5% rule and occasionally check my bankroll against Malmuth's formula, my poker bankroll should be easy enough to manage allowing for a 5% risk of ruin. (I will actually cut my risk of ruin to zero by following the 5% rule, as long as I always move down when necessary.)

However, this formula may turn out to be more useful when I look at my horse betting strategy. Which brings me to the topic for next time--why it is possible to win in the long-term when betting on horses, and bankroll managment strategies specific for playing at the track.

Until then, happy gambling.