The Five Percent Rule = Online Poker Success

five percentOver your lifetime, your grandmother, parents, or another conservative figure in your life has probably said “don’t put all your eggs in one basket”. As boring as that sounds, it’s often the truth when it comes to online poker.

This is where most online poker players fall off the tracks and I am no exception. Trust me, back in 2004, during the poker boom, I was a 19-year-old muti-tabling $10/$20 NL/PLO, winning and losing $5k to $10k every day. I had no perception of how to handle a bankroll. So many poker players I have seen over the years, online or live, have the same issue. No matter your skill level, in order to set yourself up for success you must treat your poker career like a business and have a plan to control your bankroll and make it “behave”.

It’s been in my experience that you should only buy in to a cash game that puts less than 5% of your bankroll at risk on any given table. Yes… 5%. (For those action junkies reading this, I know this doesn’t sound very appealing, I used to be one so I’ve walked a mile in your shoes.) This same rule should apply whether you’re playing one or 10 tables and wherever you play online poker, whether on any of the regulated sites or on offshore sites such as Carbon Poker.

For Example:
If you want to play at a cash game table with $50 max buy-in and blinds of $.25/$.50, you need to have a bankroll of at least $1,000.

In my opinion, this is the most vital rule to becoming a profitable online poker player because it ultimately gives you control over your bankroll rather than the game controlling you. As you increase your roll over time, you then can validate moving up stakes once you hit certain thresholds accordingly.

Sticking to the 5% rule helps online poker players do three important things:

Treat Your Poker Like a Business1. Treat the Game Like a Business

If you have ever run a business, you understand the value of having a consistent and stable organization. This same principle is relevant when it comes to your bankroll. Minimize your swings. If you play better than over 50% of the players you play against, you mathematically will win OVER TIME. But “over time” means you must have discipline, patience and the willingness to plan and stay within the boundaries that the size of your bankroll dictates. As soon as you understand this concept, the game comes to you

2. Diversify Your Portfolio/Spread Your Risk

I am not going to get into the topic of price/earnings ratios of stocks in this post but I wanted to create a cross-reference into the financial world to help explain the reasoning of the 5% rule. If you play poker online, think of every table as an investment vehicle. Traditionally speaking, financial advisors with any salt will gear their clients to diversify their portfolio into good growth stock mutual funds. Even if one company completely goes belly-up, you have 100 other companies in the mutual fund to “pick up the slack” and hedge your investment.

Switching to a poker scenario, let’s say you are sticking to the 5% rule with your bankroll and are playing at three tables simultaneously. Let’s say you get unlucky with 3 all-ins. In this unfortunate situation, you’ve still “only” lost 15% of your roll. How would such a run affect your play if you had instead lost 50% or 75% of your bankroll in one hand?

Tilting at the Poker Table

Tilting at the Poker Table

3. Battle against “Tilt”

Tilt, also known as playing with emotional instability after losing, can be the ultimate downfall of any player at any time. I have seen top-notch players lose buy in after buy in not because they were getting severely unlucky, but because they were playing “off their game” and, instead, on pure frustration. This is a recipe for disaster and can have an exponentially negative effect on your bankroll.

This proves to be even truer in the online poker world because of the amount of hands you see versus when playing live poker. If you’re not careful, playing for stakes that are too high and losing 25% of your roll in one hand can trigger an emotional spiral that can deplete your bankroll before you’ve even realized what happened.

Think about how you can apply the 5% rule to your online poker or live poker strategies. This truly does give you more control over your bankroll and increases your success rate as an overall poker player and a manager of money.

“A poker player with a plan is working. A poker player without a plan is gambling.”

Cris Reed offers consultative sessions for poker strategy, bankroll management or online room selection based on individual clients. You can contact him at: profitfrompoker97@gmail.com.

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