As a recreational poker player, managing your bankroll is akin to taking Monopoly seriously (assuming anyone still plays it): you want more money, you want to win……but if you don’t win in the end, it’s not going to put you out on the streets. As a professional player, you want more money and want to win, but if you don’t win over the long haul, you will be put out on the streets.
This is where the term “risk of ruin” comes into play because you are essentially ruined by losing an entire bankroll. As a pro, you’re not like some carefree micro stakes player who can blow everything in $0.05/$0.10 No Limit Hold’em only to come back next week and deposit another $10. So on a professional level you constantly have to factor the risk of ruin concept into choosing games.
If you have a $10,000 bankroll, you are rarely going to risk losing more than 2% of this in a game filled with fellow professional players. On the other hand, you might bring the whole thing with you into a juicy game filled with fish.
To put risk of ruin into a simple numbers perspective, let’s say you have a 50% chance of winning or losing in any poker game. And if you took 5% of your bankroll into a game every time, you would need to lose 20 straight times to be ruined. Taking 1 divided by 2 twenty times in a row, you only have about a 1 in 1,000,000 chance of losing everything by taking 5% of your bankroll into a game 20 straight times.
Obviously players take much bigger risks than this, which is why then end up broke time and time again. However, the key is to put yourself in comfortable situations where you won’t be ruined by a few bad games in a row.
