I've seen references to a 3-to-1 risk/reward ratio as a good target in several posts (for example: http://www.elitetrader.com/vb/showthread.php?s=&threadid=14617&highlight=risk+reward+ratio). The definition I found was to divide the expected return by the std dev, which means that people are expecting a 3% gain with a 1% std dev. Is this accurate? This seems WAY to optimistic to me, because under a normal distribution curve, two standard deviations from the mean of 3% would mean that 98% of trades are equal to or better than 1%! I'm thinking that some people are flipping the numbers around. Can someone please clarify this for me?