[quote=@King Cosmos]
What do you mean by a limited number of challenges? Do you mean if you challenge the person above you and lose, say, five times you can't challenge them again? I assume this count resets if the order changes, so if either the person above you goes up a rank or you drop a rank?
[/quote]

Think of it like a 'once a month' thing. The academy is split up into three seasons and in each season you get three challenges. If you rise a rank, you get another challenge. Basically, you get three shots at ranking up. If you succeed in one of them, the shot isn't used up. if you lose, however, that one's expired. Three strikes, you're out for the season. You can't climb anymore.

EDIT: Though, honestly, it shouldn't come into play too much. YGO is pretty 'one and done' when it comes to measuring skill, so there's a good chance if you lost once you're going to keep losing until you've either massively improved or the other guy's in a slump.