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 Bankroll Considerations with Example Pictures and Stuff
This was going to be part of my 1000th post but I figured it would be a better post by itself.
I feel like the single most destructive thing a player can do to his potential in poker is to not follow good bankroll guidelines. First and foremost, poker is gambling, and like it or not, there is a chance that you're dealt AA for 1,000 hands in a row and lose every single time. Sometimes we make more money than we're supposed to, and sometimes we make less money than we're supposed to. We tend to call this fluctuation variance. This fluctuation will even out in the long run as long as we don't allow it to pull us to being busto. I've put together a couple of pictures to illustrate what I mean for those visual learners out there. Assume the x-axis is the number of hands, and the y-axis is your bankroll.
 
In the first picture we see how a smaller fluctuation in bankroll allows us to steadily grow over time. This is what good bankroll management allows for. In the second picture, we see how a larger fluctuation can cause us to go busto, even if we are beating the game we're playing in. Note that the hands after where the blue arrow is wouldn't even be played because we would be broke at that point.
So how do we control this fluctuation? The key thing for you to realize is that you can't stop the fluctuation and you can't control it. The only weapon you have against variance is a deep enough bankroll that keeps the fluctuations from busting you. This single fact is the reason why bankroll management is so important -- without it you will go bust eventually, like it or not. You really don't have a choice in the matter.
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Originally Posted by Warpe
