Disliked{quote} There have been some market flash crashes in recent years, but I'm not sure how significant they really were.Ignored
The thing to do is study the price action. In most of them, if not all, the price action leading up to the flash crash was really nasty, price looking sick and wounded. Any buyer before the actual crash was attempting to pick a low. That's how traders can get CONFIDENCE in not being positioned the wrong way, study the price action of any big dump because there are normally many clues as to further weakness. I'm not saying if you study you'll be able to pick up on a flash crash before it happens (we only get 0.5-1 a year I reckon and those are of different magnitudes), just that the price action before the event suggests further weakness whether another 30 ticks or 300.
Obviously with a proper Black Swan there will be zero clues in the price action because nobody saw it coming. So it's possible for any market to be at all-time highs and looking really good and then BAM. However, in such an occasion the market probably won't make its real move until the event is properly broadcast. 9-11 was a good example, it probably took 20+ mins for the market to realise what had just happened and when everyone knew the real moves could happen. But in the 5-10 mins after the event prices did get hit but not enough for anyone to suffer a catastrophic loss because nobody had the proper facts. So yes, a really bad fill on your stop but you're still in the game...
Road To Wisdom? To err and err and err again, but less and less and less...