Seasoned poker players will usually assure you that money management is at least as important as any other factor in skillful play. Many of them say that it is the most important single factor. I am going to start this section with a few general but absolutely essential statements.

First, the factor of courage. Here I will quote from a book by the celebrated card expert, John Crawford, because I could not possibly say this better:

"A winning poker player must have a combination of two qualities. They are knowledge and courage.

"The knowledge part is what you can read about in books.

"The factor of courage cannot be taught; but you can't win without it. When you get into a poker game, you aren't there to keep from losing. You're there to win. And to do that you must back your good hands to the limit, and risk your money when you think you're right.

"This lack of courage is the reason so many poker players are at a disadvantage once they start losing. Every time another player bets aggressively, their first reaction is one of fear. They check when they should bet, and drop when they should call, thus winning too little on their good hands and losing on too many of their fair hands.

"I have known men who were formerly good poker players but who lost their courage, either through a reduced financial position, or family responsibilities, or even a seemingly interminable losing streak. They promptly changed from good players to poor ones. If the amount of money at stake is frightening to you, I can only recommend that you appropriate a certain amount of money that you are able to lose and play that money as though it were an unlimited supply. If you lose it all, quit the game. While you're playing you'll have a chance to win."

That ends the quotation from Crawford and brings up the factor of capital. Proprietors of gambling houses used to say that their principal advantage came from the fact that "a sucker will sit and lose more than he will sit and win." It is necessary to limit your losses. When you are losing you are probably an inferior player anyway; your standards are distorted in your anxiety to get even. The most widespread of mistakes in money management is to quit a game when ahead and sit out long hours of a futile losers' game when behind.

Figure what your capital is. In any one game, you should not lose more than 5 percent or at the very most 10 percent of that capital. The game selected should be one in which you will get a fair early play for your maximum appropriation, perhaps one or one and one-half or two stacks, but when you have lost that amount you should leave the game. When you are winning, you should stay as long as you want to or as long as you can keep on winning. Suppose your capital is $500; you should play in a game in which you can probably play an hour or so on $20 to $30, even if you are holding nothing, but in no case should you let yourself lose more than

Having gotten ahead, you should salt away your capital and play from that point on on the other fellow's money. At the very least, it is psychologically disturbing to wind up a loser after having been well ahead; and any psychological hazard reduces your effectiveness.

Third, always use the same method of money management. A method of play is either right or wrong. If the method isn't right, you shouldn't adopt it in the first place. If it is right, you shouldn't deviate simply because you are feeling down in the dumps on account of your unlucky streak or over conservative because you want to hang on to your winnings. A good rule is this: The first time you find yourself doing something midway of the game that you wouldn't have done on the very first hand, such as playing when ordinarily you would have dropped, or failing to bet or raise or call when ordinarily you would have done so, that is a good time to quit the game. (In appraising your game, be honest with yourself.)

Now, as to your money management in a particular game. You might say that there are two main approaches to the question of betting in poker. One type of player likes to wait for a big hand and play it for a killing. He tries to build up the pot when he is pretty sure he will win it. If he can't build up the pot, he doesn't particularly care how much he wins. The other type of player looks for a lot of action and plays whenever he thinks he has the odds in his favor. He is in many more pots than the first type of player and of course he wins more pots but he invests more going into pots that he doesn't win. I don't mean that he plays bad hands, because then he wouldn't win, but he is content with a succession of small profits.

Since good poker players have followed both lines, obviously there is something to be said for each of them. Much more, however, depends on the game you are playing. In some games, you are forced to one line of play or the other.
Take a draw poker game with a low limit and an ante every pot, or a blind opening—say a blind-opening game in which the dealer antes $1, the next player opens blind for $1, the next player raises to $2. It costs you $4 per round just to sit in the game. In such a game, you cannot be too conservative. You must be in there every time the odds favor you, even slightly.

For example, in an eight-handed game a pair of aces is likely to be the best hand going in. The best hand going in is mathematically likely to be the best hand in the showdown. If you have aces or better, you have to open, even if you sacrifice some position by doing so, because you have to get your full share of the $4 pots that start off every deal. There are two reasons why this is forced on you. The cost per round will eat you up otherwise, and the low limit prevents your being badly hurt even when someone has a better hand or draws out on you.

At the opposite side of the problem is the typical stud poker game. Here there is almost never an ante, so there is no overhead. You can afford to play them very close, waiting for the best hand at the table before you bet at all. Assuming you do not suffer socially, you can sit for an hour without ever playing except when you are forced high and must make the first bet.

In a table-stakes game, when the bets are usually low but can rise to extremely high levels, you have a choice of tactics. It is in such games that players flourish who wait for a killing.

The basis of money management is to avoid the occasional cases in which you are tempted to toss in a chip or two to see what would happen, on a hunch, because you are bored, or because you just won a big pot. If a bet is unsound it figures to lose, and in the course of a long session you can throw away a frightening amount of money in these occasional lapses. Self-discipline is important to a poker player.

Many players waste away their stacks by failure to anticipate later developments. For example, you are playing in a game with a high ante and low limit, so that you find yourself able to stay in for $1 or $2 when there is already $10 or $15 in the pot. At the moment it seems very attractive, because you are getting 7 to 1 or more and you have perhaps a low pair that has one chance in four or five to improve to a probable winning hand. But if you know your game, you may know that the players are liberal and that there are going to be two or three raises and reraises before it actually comes to a draw. You have to decide in advance if your hand is good enough to stand those raises. Obviously, on a low pair it isn't good enough and you save $1 by getting out fast.
Another thing to remember is that every raise shortens the odds. I will give you a simple example based on the game mentioned before. You have a $1 ante by the dealer, a $1 blind opening by A, and a $2 blind raise by B. If C opens (in effect) by raising to $3, and all the others drop, B can come in for $1 and get 7 to 1 on his money. There is $7 in the pot and he need put in only $1. If another player raises to $4, the pot goes up to $11 but it costs him $2 to stay and now he is getting only 51/2 to 1. And so on, every time there is a raise.

Some authorities advocate adopting a strict system and sticking to it. That would be excellent if there were such a system, but I'm afraid there isn't. A system can cover precisely the times when you play, you raise, or you drop, but it can't cover the questions of judgment that are bound to arise sooner or later— whether or not to call, whether or not someone is bluffing or underestimating his hand. You can lose enough by misjudging these situations to offset the advantages of the system.

The most nearly foolproof system I have seen is the one advocated by the excellent poker writer and player who writes under the name of "Jack King." He applies it to table stakes stud. If he plays at all, it is because he believes he has the best hand at the time, and then he pushes in his entire stack. If his appraisal of his hand is correct (as it almost always will be) he has the best chance of winning. This is a simple application of the rule that the best hand going in will probably be the best hand coming out. But there is the social drawback (in an informal game the other players probably won't like this system); and possibly they can beat the system anyway by calling only when they are pretty sure you have overrated your hand. If they learn to do this, your winning pots are mostly peanuts and you can lose back a lot when you go wrong.

Nevertheless, table stakes creates a completely different set of standards in money management. When circumstances are such that you can bet your entire stack, you assure yourself of a showdown without further risk or problems, and if other players have bigger stacks one or more of them may have to drop out later on when if he had stayed in he might have outdrawn you.

I would like to add just one personal comment on money management. Nothing upsets it so much as playing a "friendly game" in which there are certain players against whom you are not supposed to do your worst. To make the percentages work correctly, you have to be able to win the maximum when you have a winning hand, no matter whether the player with the losing hand is your friend or your enemy. It is unethical—worse, it is considered a form of cheating as bad as stacking the cards —to enter into collusion with another player to trap a third, therefore you have no compensating gain from your friendly agreement. It isn't always possible to avoid such situations, but stay away from them as nearly as you can.

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