It Begins With a Bankroll
Basil Nestor is the author of the new Playboy Complete Guide to Casino Gambling. This wonderful book teaches players how to avoid sucker bets and win more when playing gambling games. He is also the author of The Smarter Bet Guide series for video poker, slots, craps, and many other books about gambling. Basil's website is www.smarterbet.com is gone. This approach is fine, but here are some better and more sophisticated ways to use a bankroll.
Session Bankroll: One popular method used by many professional gamblers is to divide a bankroll into portions that are risked during sessions. Typically, these are two to three hours of play, once or twice a day. Some people have sessions that are four or six hours. The particular length doesn’t matter, but the important thing is that the session ends immediately if the session bankroll dips to zero. Thus one bad session cannot nuke a whole gambling trip.
Rolling Stop-Loss: A rolling stop-loss is a more sophisticated method of handling a stop-loss. It works better than the typical “stop when you lose it all” rule. It also prevents the disappointment of being significantly up and then losing it all back.
A rolling stop-loss can be any amount you choose and there are various ways of calculating it, but the “sliding window” is pretty typical. Let’s say you start a session with 100 bets. If you win 50 bets then the window slips forward by that amount. The original stop-loss was zero (a net loss of 100 bets); the new stop-loss has moved forward to 50. You always exit the session if you lose 100 bets from the highest point of the bankroll. That means you’re permanently in a profit zone after a net win of more than 100 bets.
Some people have a rolling stop-loss of three. That’s right, three. For example, I have a buddy who is a craps player. He bets one unit per pass and slowly increases if he’s winning. His rule is “three lost bets and I’m out of there.”
Setting a Stop-Loss and a Win-Limit
The downside to having a narrow stop-loss window is that a session can end abruptly. That’s not necessarily a bad thing, but it’s not automatically good either. Keep in mind that there is a direct relationship between the size of your stop-loss and the total amount you can lose or win. In other words, limiting your losses also limits potential profits because you cannot predict when the dice, cards, or wheels will turn your way.
The ideal stop-loss is one that matches your temperament and betting style.
Ditto for a win-limit. This is a win amount that would cause you to exit a session. Many people use a static win-limit of double the buy in or double the session bankroll. Some people have a rolling win-limit.
Like a stop-loss, a win-limit doesn’t change the house edge, but it does lock up profits for a particular session. After all, you must leave the casino at some point. You might as well leave when you’re up.