Introduction
Imagine a market as a quantum particle whose path depends on every step it’s taken—its past volatility shaping its future risk. Dr. Glen Brown’s Law 4 of the Nine-Laws Framework captures this with sub-linear √P scaling, tying the Dynamic Adaptive ATR Trailing Stop (DAATS) to the square root of price movements, and death-stops that enforce disciplined exits. Integrated into the Global Algorithmic Trading Software (GATS) strategies (GATS1 to GATS43200), this law leverages path-dependent memory to balance exposure and trend-following. This article examines how GATS strategies implement these principles across timeframes, blending quantum insight with practical trading control.

Understanding Law 4: Exposure & Death-Stop
Law 4 establishes that exposure is managed through √P scaling, where DAATS at 16x ATR(256) (reflecting √256 ≈ 16 exposures) adjusts sub-linearly to volatility, ensuring stops cover deep corrective waves without overexposure. The death-stop mechanism holds trades until DAATS is hit or a fractional break-even (e.g., 1/16 of risk) is achieved, trailing at 8x ATR thereafter. In choppy regimes (e.g., EMA Zones in Correction, Light Coral), stops widen to 20x ATR(256) to avoid false exits, while in trending regimes (e.g., Momentum Zone, Lime Green), they tighten to 12x. This approach, validated weekly by GNASD, optimizes risk across all GATS strategies.

Quantum Analogy: Path-Dependent Memory and Hilbert Space
In quantum mechanics, a system’s evolution depends on its historical path, encoded in a Hilbert space where states evolve with memory. Similarly, Law 4’s √P scaling reflects path-dependent memory, adjusting DAATS based on past volatility (√256 ≈ 16) to predict future moves. The death-stop acts like a quantum measurement, collapsing the trade’s state when volatility thresholds are breached, while the Hilbert space analogy frames market regimes as interconnected states, navigated by GATS across timeframes.

GATS Integration Across Strategies
The nine GATS strategies apply Law 4 with timeframe-specific adaptations:

• GATS1 (Global Momentum Scalper, M1): Sets DAATS at 16x ATR(256) for 0.01%–0.1% risk trades on M1/M5/M15, widening to 20x in choppy M1 regimes, exiting at 1/16 break-even.
• GATS2 (Global Quick Trend Trader, M5): Applies 16x DAATS for 0.02%–0.2% risk on M5/M15/M30, tightening to 12x in strong trends (ADX > 20), trailing at 8x ATR.
• GATS3 (Global Rapid Trend Catcher, M15): Uses 16x DAATS for 0.03%–0.3% risk on M15/M30/M60, adjusting to 20x in Correction Zones, holding until death-stop.
• GATS4 (Global Intraday Swing Trader, M30): Implements 16x DAATS for 0.04%–0.4% risk on M30/M60/M240, widening in choppy swings, exiting at break-even.
• GATS5 (Global Hourly Trend Follower, M60): Sets 16x DAATS for 0.05%–0.5% risk on M60/M240/M1440, tightening to 12x in trends, trailing post-break-even.
• GATS6 (Global Four-Hour Trend Follower, M240): Applies 16x DAATS for 0.06%–0.6% risk on M240/M1440/M10080, adjusting with GMACD (15, 25, 8), holding to death-stop.
• GATS7 (Global Daily Trend Rider, M1440): Uses 16x DAATS for 0.07%–0.7% risk on M1440/M10080/M43200, widening in choppy daily regimes.
• GATS8 (Global Weekly Trend Rider, M10080): Sets 16x DAATS for 0.08%–0.8% risk on M10080/M43200, tightening in stable trends, trailing at 8x.
• GATS9 (Global Monthly Trend Rider, M43200): Implements 16x DAATS for 0.09%–0.9% risk on M43200, adjusting to 20x in volatile months, exiting at death-stop.

This scaling balances exposure, with shorter timeframes (GATS1–GATS3) prioritizing quick exits and longer timeframes (GATS7–GATS9) holding for trends.

Trading Example: XRPUSD on June 28, 2025, 05:14 PM EST
At 05:14 PM EST today, XRPUSD shows a trending setup: EMA Zones in Acceleration (Medium Sea Green), blue HAS candles on M60, I-Trend Green > Red, GMACD upward, and ADX = 22. ATR(256) = 0.02, DAATS = 16×0.02 = 0.32, tightened to 12×0.02 = 0.24 in the strong trend.

• GATS1 (M1): Sets DAATS at 0.24 for a $10 risk (0.01%) trade on M1/M5/M15, exiting at 1/16 break-even ($0.625) after a 0.05% move ($50 target).
• GATS5 (M60): Adjusts DAATS to 0.24 for a $50 risk (0.05%) trade, trailing at 8x ATR (0.16) post-break-even ($3.125), targeting $250.
• GATS9 (M43200): Maintains DAATS at 0.24 for a $90 risk (0.09%) trade, holding to death-stop, targeting $450 as the monthly trend develops.
  In a choppy regime (e.g., Correction Zone), DAATS would widen to 0.40, validated by GNASD.

Quantum Connection: Navigating Path-Dependent States
The √P scaling and death-stop reflect quantum path-dependent memory, where past volatility (√256 ≈ 16) shapes current risk in a Hilbert space of market states. The sub-linear adjustment ensures DAATS evolves with the market’s historical path, while the death-stop collapses the trade state when thresholds are breached, mirroring a quantum measurement. This approach guides GATS1–GATS9 through volatile and trending regimes with precision.

Risk Controls

• √P Scaling: Adjust DAATS from 12x to 20x ATR(256) based on regime (e.g., 0.24 to 0.40), capping exposure at 16 ATR units (Law 4).
• Death-Stop Discipline: Exit at DAATS or 1/16 break-even, trailing at 8x ATR, ensuring 5:1 reward-to-risk (Law 5).
• Regime Adjustment: Widen DAATS to 20x in choppy regimes (ADX < 18) for GATS1–GATS3, tightening to 12x in trends (Law 6).
• Portfolio Limit: Cap total risk at 2%, scaling exposure by timeframe using GNASD (Law 7).
• Validation: Recalibrate √P scaling weekly if drawdowns > 5%, adjusting ATR periods (Law 9).

Key Takeaways
Law 4’s exposure and death-stop, driven by √P scaling and path-dependent memory, equip GATS1–GATS9 to manage risk across timeframes. This quantum-inspired approach ensures disciplined exits and adaptive stops, from rapid scalping to long-term trends, strengthening the Nine Laws’ risk framework.

About the Author: Dr. Glen Brown
Dr. Glen Brown is the President and CEO of Global Accountancy Institute, Inc., and Global Financial Engineering, Inc., where he pioneers proprietary trading methodologies blending financial engineering with quantum-inspired principles. With over 25 years of experience in finance, accountancy, and trading, Dr. Brown holds a Ph.D. in Investments and Finance and is a recognized expert in developing algorithmic trading systems. His Nine-Laws Framework and Global Algorithmic Trading Software (GATS) reflect a commitment to rigorous research and innovative risk management, serving internal proprietary trading and academic exploration.

Closed Business Model Disclaimer
Global Accountancy Institute, Inc. and Global Financial Engineering, Inc. develop proprietary analytics and frameworks exclusively for internal research and academic publication. No external services, licensing, public courses, or advisory services are offered. All methodologies, including the Nine-Laws Framework and GATS strategies, are designed for in-house desk development and proprietary trading.

Risk Disclaimer
Trading involves significant risk and the potential for substantial losses, including loss of principal. The techniques and examples discussed are illustrative and not financial advice. Past performance is not indicative of future results. Users should conduct their own due diligence, consult qualified financial advisors, and implement appropriate risk management before applying any strategies. The Nine-Laws Framework and GATS strategies are educational tools for internal use by Global Accountancy Institute, Inc. and Global Financial Engineering, Inc.