This talk of a saddle point...I use something similar to my own risk management, if it in fact refers to what I think it does. First of all, the existence of a point where risk may be more concentrated necessitates the existence of a preset performance benchmark target, equidistant in nature to a preset performance drawdown point. For example, 10% gain or 10% loss. Now assuming multiple trades must be taken within this framework, if the question is about some R/R multiple, that depends on the MAX desired (predetermined) percent risk allowed for any one trade.
So back to the example. Let's say I want to gain either gain 10% or lose 10% over a series of trades (Why I want to do this in the first place is because if I happen to gain rather than lose, I could then double my leverage, for instance. That would be the only point). And let's then also say I am only willing to risk UP TO 5% on any one trade. How then best to incorporate that risk into the target percent/equidistant drawdown percent framework? The answer lies in the creation of a "midpoint" between the target percent point and the drawdown percent point. At the very middle is where it is best to risk the most (up to, but not more than my initial allowed max risk per trade of 5%). As I get closer to EITHER side of the extremes, that risk percent has to come down, independently of absolute gain or loss. The closer I get to either my 10% target or my 10% drawdown point, that 5% per trade may then become 3% per trade, or even 1% per trade if I'm really close to EITHER "target". The optimal R/R multiple is based on that initial predetermined risk percent (in our example it was 5%), ASSUMING that from the first trade the best possible outcome would be achievement of the target benchmark in one single trade. Thus, in this example it would be 2:1 reward/risk. For instance, if my maximum desired risk on any given trade were 3% instead, the optimum R/R would then be 3.3/1. So basically as (or if) I get closer to the "middle point" my risk increases, and as i get closer to the extreme my risk decreases. Why would I want to decrease my risk percent as I get closer to my target benchmark? Well because if I know my max desired risk percent, and then my extension the optimum R/R corresponding to it, as I get closer to my target percent, I don't need to take AS big a risk to get there - rather just enough to get there on one trade. Perhaps that's what a saddle point may refer to?