> For the complete documentation index, see [llms.txt](https://docs.supertrade.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.supertrade.com/rulebook/risk-management-rules/overall-drawdown.md).

# Overall Drawdown

Overall Drawdown (Overall Loss Limit) is the maximum amount of funds you can lose during trading.

{% hint style="danger" %}
Breaching overall drawdown = **automatic position closure** and **account pause**. These rules are strict and cannot be bypassed or reset.
{% endhint %}

Supertrade utilizes *two types of overall drawdown calculations* for Lite & Classic models:

* **Classic Challenges** — Static Overall Drawdown
* **Lite Challenges** — Trailing Highest Overall Drawdown

### \[Classic] Static Overall Drawdown

Static Overall Drawdown (Overall Loss Limit) is a **fixed amount calculated from the initial account balance.** 

If your equity or balance drops below this threshold - account will be breached and deactivated.

**How is it calculated?**

* Overall Drawdown Limit (Static) = Initial Account Size − (OD% \* Initial Account Size)

{% hint style="info" %}
**Example:**

* Account Size: $100,000
* Overall Drawdown (Static) = 10% 
* $100,000 \* 10% = $10,000
* $100,000 - $10,000 = $90,000.
* Your account equity/balance must never drop below $90,000.
  {% endhint %}

Overall Drawdown (Static) is fixed and will not be recalculated after payout or in any other case.

### \[Lite] Trailing Highest Overall Drawdown 

Trailing Highest Drawdown is **calculated as a percentage of the highest equity value during the trading day.** This means that your maximum loss limit adjusts based on your account’s performance during the day. 

If your equity increases, your overall drawdown limit also moves up. However, it does not decrease if your equity drops, ensuring a dynamic but protective risk management system.

{% hint style="info" %}
**Example:**

For a fresh $1,000 account with 5% trailing drawdown, your overall drawdown limit is $50. If your account balance or equity drops below $950, your account will be breached.

If your equity grows to $1,100, your drawdown limit is recalculated ($1,100 \* 5% = $55) and moves up to $1,045 (5% below your highest equity). If your equity later decreases, the trailing drawdown freezes at its last high point and does not go lower.

Trailing drawdown will not be recalculated after a payout. If you receive a $100 payout, your equity will drop to $1,000 and the account will be breached. 
{% endhint %}


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