I always drop down the stakes when it is not going well for me in poker cash games. It always always help me to be able to decipher better. I drop down stakes and build confidence first.
After a terrible beat, the best option is to drop down a bit and start to build up confidence and safeguard bankroll from further depreciation. Stepping down the stake is a bankroll management strategy every player suppose to incorporate into his games!
Yes, I do drop my stakes when losing cash games. Less stakes would allow me to restore my confidence without putting too much at stake. It's even a clever strategy to remain in control and not to lose much as I get to understand what is going on in the game.