  The shot-noise detection limit in current high-precision atomic magnetometry
is a manifestation of quantum fluctuations that scale as the square root of N
in an ensemble of N particles. However, there is a general expectation that the
reduced projection noise provided by conditional spin-squeezing could be
exploited to surpass the conventional shot-noise limit. We show that continuous
measurement coupled with quantum Kalman filtering provides an optimal procedure
for magnetic detection limits that scale with 1/N, the Heisenberg squeezing
limit. Our analysis demonstrates the importance of optimal estimation
procedures for high bandwidth precision magnetometry.
