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.

Let's consider an example to illustrate this calculation. Suppose you have purchased an Evaluation 100K 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 in 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.