Using a long string gives a falsely high reading of poundage (due to the wonders of geometry). You need to get a short string on and carefully get it to braced height.
To answer you other question, you stop pulling it back when you get to your target draw weight, your target maximum draw length or it breaks whichever comes first.
It is an act of faith in the wood and your skill really, you need to 'get your eye in' when it comes to judging the curve of a bow.
If you have any doubt stop and think and check. My personal preference is to spread the curve over as much bow limb as possible, this spreads the load and should give maximum bend before break.
I'm sure every one of us gets very nervous on thoes last few inches of tillering, and we've all had 'em go BANG...
If you don't have faith, you'll just end up with a short drawing low poundage bow.
That's one reason why you should have a target draw length and weight in mind when you start, but of course it needs to be chosen according to the stave, it's no good wanting 60# at 32" out of a 55" Hazel stave.
Del