Counting cards is a form of risk management via conditional bet sizing based on prior history. (Semantics). Bet more when the odds are in your favor, less otherwise. I trade the same way
That's EXACTLY what all of us traders should do. But how do we know when "the odds are in our favor"? (Trick question... I already know the answer, as do some other ETers. ) BTW... "Counting cards" in black jack is more than just risk management... which is why the casinos "frown" upon it.
SOME stochastic processes can be controlled such that they behave in our favor. For example, one can take a zero-mean Gaussian process (which the market obviously is not) and asymmetrically truncate the tails (target and stop) such that the expectancy of the controlled process is positive. The "sauce" is to reliably establish what p(y|x) (i.e the odds) ... but thats the whole point. People are looking for an edge by only looking at the first moment of p(y|x) distribution being positive... that's a naive approach, imho. Most of my returns come from the higher order moments (volatility and kurtosis).
I agree, it can also be an opportunity to split a pair 8's on up and double down if dealer is showing 2-6 and player knows many 10's/face cards in the deck.