For traders participating in the Evaluation, Express, and Stellar 2-Step Challenges, a maximum Overall Drawdown of 10% from their initial balance is allowed. On the other hand, for traders enrolled in the Stellar 1-Step Challenge, a maximum Overall Drawdown of 6% from their initial balance is permitted.

Additionally, for traders participating in the Stellar Lite challenge, the permissible maximum Overall Drawdown Limit is 8% of their initial account balance.

Let's consider an example to illustrate this calculation. Suppose you have purchased an Evaluation $100,000 account. Here's how the calculation works:

**Case 01:**

Suppose you start with a $100,000 account, and your Overall Maximum Loss Limit is set at 10% ($10,000). This means that if your account balance/equity ever drops below $90,000, it will be considered a violation of the rule. To avoid any such violations, you must ensure that your account balance/equity remains above $90,000.

**Case 02:**

Now, let's say you start with a $100,000 account and make a $4,000 profit. In this scenario, your overall maximum loss limit will increase to $14,000 ($10,000 original limit + $4,000 profit). This means that you can sustain a total loss of $14,000, and if your account balance/equity ever drops below $90,000, it will be considered a violation of the rule.

**Case 03:**

Suppose you start with a $100,000 account, and after your Trading Cycle, you end up with a loss of $2,000 without any violations. This means that you have to start your next Trading Cycle with a balance of $98,000. It's important to note that in this scenario, your Overall Maximum Loss Limit will not be reset in your next cycle, and it will be reduced to $8,000 ($98,000–$90,000). Therefore, if your account balance/equity drops below $90,000 at any point during your trading journey, it will be considered a violation of the rule. (both in Challenge Phase/FundedNext Phase).

In summary, understanding the Overall Maximum Loss Limit is crucial to managing your trading account. By keeping your account balance/equity above the 90% threshold, you can avoid any potential violations and ensure a successful trading journey.