help me confirm this logic!

I'm having discussion with a programmer about using martingale on my strategy (yea i know. it's just for fun)

Basically every time a setup occurs, it figures the stop loss
from this equation using 0.1% risk

close -/+ ATR*constant

Target profit = close -/+ ATR*constant

so if I use martingale, after each win I 'should' recover all losses plus 0.1%. Is that right?
The programmer is alluding that since each setup has different ATR and close, the EA doesn't always bring me back into a profit after a win.

my reasoning is that it doesn't matter what the ATR or the close is, i'm using the same amount 0.1% and doubling after a loss. And when the win comes I should recover with profit.

am i missing something??

your reasoning assumes that each loss is an equal distance apart. As you're using an ATR-based stop, there is no guarantee that the stops are equal distances, and thus, the amount lost per trade can vary.

If i'm risking the same % for every trade, why does it matter what stop loss is? If the ATR is big, the same % would give me smaller lots, and vice versa.

Provided that i take 1:1R then with martingale i should be able to recover.

i just don't get it. Could you use numbers to explain?

Let's say I start out with 100.

I lose 10%, now I have 90.

What should me percent return be in order for me to get back to 100?

10%? NO

It should be 11% because my percent return is based on the new balance.

If you are indeed risking the same % per trade, that will change, and the required % return on that trade increases.

oh yes i understand that. The martingale would have to take percentage of the balance before it loses. That's the logic I had.

So in the example, everytime I lose, I still take 10% of 100 at 90.

so in this case i would get back at b/e. Except if i use martingale i would be risking 20% of 100
so i get 110

Well, if you're only basing that risk profile against your starting balance, it seems to work out.