Based on Dr. Glen Brown’s Nine-Laws Framework & GATS Methodology

Introduction

This guide describes a systematic, weekly process for updating and managing a portfolio of 28 major FX pairs using the Nine-Laws quantum-inspired risk engine. Each week you will:

1. Refresh DAATS data and recompute universe statistics.
2. Recalculate per-pair ATR, Death-Stops, Break-Even points, Profit-Targets, and risk allocations.
3. Apply Laws 1–3 to gate new entries by regime.
4. Enforce Laws 4–6 for one-way, ratcheted stops and data-driven break-Even trails.
5. Allocate and buffer positions via Laws 7–8.
6. Invoke Law 9: validate performance and recalibrate all couplings.

1. Weekly Data Update

• Obtain the latest M1440 DAATS values for all 28 FX pairs.
• Record each pair’s DAATSₖ (points) and update any missing data.

2. Compute Universe‐Level Metrics

Using the 28 DAATSₖ values:

• Total DAATS = Σₖ DAATSₖ
• Mean DAATS (μ) = Total DAATS / 28
• Population σₚₒₚ = √[ (1/28)·Σₖ(DAATSₖ–μ)² ]
• NoiseFloor = σₚₒₚ / 28
• Aggregated ATR = Total DAATS ÷ 16
• Portfolio Death-Stop = 16×Aggregated ATR
• Portfolio Break-Even = 1×Aggregated ATR
• Portfolio Profit-Target = 5×Aggregated ATR

3. Calculate Per-Pair Risk Parameters

For each pair i:

1. ATRᵢ = DAATSᵢ ÷ 16
2. NoiseFloorᵢ = (σₚₒₚ / 28) ≈ 243 pts
3. rᵢ = ATRᵢ ÷ NoiseFloorᵢ
4. kᵢ = ceil(rᵢ) → σ-multiple for BE
5. Death-Stopᵢ = DAATSᵢ
6. Break-Evenᵢ = max(kᵢ×ATRᵢ, NoiseFloorᵢ)
7. Profit-Targetᵢ = 5×ATRᵢ
8. Noise-Shareᵢ = DAATSᵢ / Total DAATS
9. Risk-Allocᵢ = Noise-Shareᵢ × 0.50%

Example: EURUSD
DAATS=13 048 → ATR=815.5 → r=3.36 → k=4 → BE=max(4×815.5, 243)=3 262 pts → DS=13 048 pts → PT=4 077.5 pts → Noise-Share=2.89% → Risk-Alloc=0.0144%

4. Regime Gating (Laws 1–3)

• Law 1 – CRTL: λₖ = DAATSₖ / Corrₖ. If λₖ ≥ λ_c, suspend new entries.
• Law 2 – WDHDI: Compute smoothed DAATS; require DAATSₖ ≤ DAATS_smoothedₖ.
• Law 3 – MSPL: If a macro-shock (ΔVIX-style) occurs, defer entries for N bars.

5. Stops & Break-Even (Laws 4–6)

• Law 4 – Death-Stop: DeathStopₖ = max(16×ATRₖ, NoiseFloorₖ) Ratchet: only widen when ATRₖ rises; never tighten when ATRₖ falls.
• Law 5 – Exit Only on Death: Positions close only on Death-Stop hit or Break-Even trigger.
• Law 6 – Adaptive BE: BreakEvenₖ = max(kₖ×ATRₖ, NoiseFloorₖ) with kₖ = ceil(ATRₖ / NoiseFloorₖ).

6. Portfolio Allocation & Execution Buffers (Laws 7–8)

• Law 7 – Noise Budget: Allocate 0.50% total risk across pairs by Noise-Shareᵢ.
• Law 8 – Slippage Optimization: Pad all stops & BE by an execution buffer (e.g. ±1σ).

7. Continuous Validation & Rebirth (Law 9)

Each week:

1. Back-test performance: stop-hits vs. BE-hits vs. PT-hits, expectancy, drawdown.
2. Compute coupling “beta-functions” βᵢ = dγᵢ/dln s for each Law.
3. Update γᵢ ← γᵢ + Δs·βᵢ to maintain critical performance thresholds.

Key Takeaways & Averages

• Average BE (daily): ≈ 1 009 points
• Average BE % of Death-Stop: 6.25 %
• Average Profit-Target % of Death-Stop: 31.25 %
• All stops & BE’s now lie outside each pair’s own noise envelope—no phantom triggers.

This weekly guide ensures your FX portfolio stays regime-aware, noise-proof, and self-calibrating—leveraging Dr. Glen Brown’s Nine-Laws Framework and GATS methodology to deliver adaptive, robust risk management.

About the Author

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 for global markets.

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.