One of the quickest ways to diagnose many sudden ranking changes is to check the Google Algorithm Change history that Dr Pete maintains here: http://moz.com/google-algorithm-change
If there have been not recent changes to the site and no external factors (big shifts in link patterns for instance) then a change in the algo is the likeliest cause of sudden change. These can be spotted by the dates when changes occur. Look at your traffic stats (or ranking reports if you check frequently) and try to pin down the date of the change. Compare that with the change history page and you have a good idea of whether it was an algo change impacting you.
Doing this also gives you some good insights in to how to then deal with the traffic change. With each algorithm update we get clues as to what is going on. Learn what you can about the update that impacted you and take lessons from that.