If your account dimishes in size too much, there is a stage where you'll get to the point of no return.  Below is a simple chart depicting how much you would have to claw back to get even again.

Before you get to this stage (and hopefully you won't) you should have it written in your trading plan to review your strategy if things start to go to pear-shaped.


% Drawdown    % gain required to recoup losses

          10                                     11.11
          20                                     25.00
          30                                     42.85
          40                                     66.66
          50                                     
100
          60                                      150 
          70                                      233
          80                                      400
          90                                      900
         100                                  busted 
 

As you can see, once losses get below about 40%, it
becomes a challenging task just to get back to
breakeven.
 
When you eat into half of your trading account capital
you have to have a 100% return just to get back to the
beginning balance.