When I first started playing poker, I had no idea what bankroll management was. I just sat in whichever games were open at the stakes I wanted to play, even if I barely had enough money in my bankroll to cover the buy-in. I worked my way up the ranks by jumping to the next level as soon as I had enough money to pay for a single buy-in. This strategy worked amazingly well for a while, but once I reached stakes where the quality of play was much higher than I was used to, my lack of bankroll management almost proved disastrous.

After playing thousands of hands and building a bankroll large enough to play in almost any game I wanted, I managed to lose almost all of it in the span of a few days. Although very painful, some good did come from these experiences: I learned the importance of bankroll management. Now instead of playing at the highest limits that my bankroll allows, I play in lower stakes games where I still feel like I am playing for a significant amount of money. Playing as low as $2/$4, $3/$6, and $5/$10 No-Limit, I am able to play a completely objective game.

There is an old saying that goes scared money is dead money. You simply can not consistently win at poker if you are playing with money you are afraid to lose. I like to play in games with buy-ins 40 to 50 times smaller than the size of my bankroll. Ten buy-in downswings are common in poker, and it is comforting to be prepared for such variance.

By observing proper bankroll management and playing at stakes your bankroll can handle, you will be able to limit the impact variance has on your game. You will be able to endure a ten buy-in downswing without going on tilt and you will not be crushed when you hit the cashier button and see that your balance has dropped dramatically. One of the biggest problems with playing at stakes that are too high for your bankroll is not being able to minimize the impact of variance. If you choose to play in a game that could wipe out your entire bankroll by losing four buy-ins, you are not going to be able to get involved in many situations where you only have a slight edge. Playing with this sort of restraint is not good for a poker player.

In an attempt to lower variance, poker players who are under rolled for the game they are in give up a lot of their EV because they are playing scared. If you happen to spot one of these players, you can easily exploit their fear. I recently played heads up against a player who was obviously playing with scared money. He was one of those players looking for an excuse to fold unless he could show the nuts. Taking advantage of his tendency to fold all but the very best hands, I picked every marginal situation I could find and attacked. Any time I found a spot where I believed he thought I could not possibly be bluffing, I would do just that.

In one such hand he bet $150 on the river when the board showed a pair and three cards to a flush. There was $300 in the pot, and I moved all in for my last $300. It was only $150 more for him to call, but he folded because it was a spot where he must have thought there was no possible way I could be bluffing. Discovering this weakness in his game made for a very profitable session for me, but I would not have discovered it if I had not been willing to shove all my chips into the middle in marginal situations, I never would have done that if the stakes had been higher or I had a smaller bankroll.

If you are properly bankrolled for whichever game you choose to play, you will be able to optimise your play in any situation that might occur without having to decide if it is a high risk move or not. By playing in games where the loss of five to ten buy-ins in a row would hardly put a dent in your bankroll, maximize your EV, enjoy less heart breaking swings in your bankroll, and hopefully celebrate an increase in your win rate, which in poker is a recipe for success.