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Question 5: What forms of money management do you recommend?

A: In an online gambling environment, most poker players define “money management” as setting a stop loss limit, quitting when you are ahead of a certain amount, and dividing trip bankroll into smaller daily bankrolls. Some people even recommend to pocket the money you started your betting session with and play with the casino money won through it. But, I personally feel that this tactic hardly makes any difference for the poker players with long-term prospects. The last advice appears the most ridiculous because if you are ahead, then the last winnings are your money and not the casino’s.

The three aspects that I will recommend to consider under money management are:

1. Risk Management: You should always consider risk of ruin (the probability of losing your entire bankroll). Adjust the size of your wagers according to the current size of your bankroll and the risk of ruin that you can feel comfortable with.

2. Avoid Stop Loss Tactic: A stop loss tactic is worthless when you are playing at an advantage, which you will always be doing if you follow my advice on the choice of games and playing strategy. If you are playing at a disadvantage, however, as you would be doing on nearly all other games, then setting a stop limit a certain number of bets below your peak winnings may be worthwhile. It won't improve your long-term expectation, but it can be useful in protecting your short-term bankroll.

3. Divide your trip bankroll: If you are a recreational player (i.e., you are gambling primarily for the fun of it) divide your trip bankroll into smaller daily or session bankrolls. This does not improve your chances of ending up ahead, but it does assure that you will be able to spend more time at the games. Just be sure to consider risk of ruin by playing at stakes compatible with the size of the session bankroll.