Flash Crashes in Forex: Sudden Drops with Big Clues Flash crashes are sudden, extreme price movements caused by a liquidity vacuum—often triggered by a fat finger trade, algorithm glitch, or geopolitical shock. Think GBP/JPY dropping 600 pips in seconds, then recovering. In 2025, even with tighter controls, flash crashes still occur—especially during thin liquidity hours (like Tokyo open or holidays). These moves create price anomalies—deep wicks or broken structure zones—that smart traders mark as future liquidity points. Some traders fade the crash, betting on reversion. Others wait for post-crash consolidation and trade the new trend. Either way, flash crashes reveal where liquidity dries up—and where institutions were caught offside. They also reflect emotional panic and poor risk management. The lesson? Respect volatility, manage leverage, and track low-liquidity windows. Crashes aren't just chaos—they're windows into the market's weakest moments. And for the prepared, they offer some of the best trades of the year.