Here is something to perhaps get your teeth into - granted this is from the c.1,200 pip Sterling flash crash of October 7th 2016 and not the JPY crash as the data is not yet public information, unless you have a DMA account and access to data - unikey. However, there are lots of similarities to perhaps look at.
Below is a chart showing a flash crash, you’ll notice the initial 10% to 15% of the decline is buoyant with both bid and ask quotes, this is where liquidity is sat at, and if your stop is sat in this phase of the flash crash it’s likely that you’ll receive less slippage. This is typical in all markets and makes sense, right?
It’s the remaining 80% of the tail where the damage is likely to hit home should you have your stop in this region, and it’s these stops that will likely to prove fruitless with a vast degree of slippage.
You’ll also see in the below chart that flash crashes don’t just ‘happen’ per se, they arise out of a downward moving market which already has a bearish bias - again, applying this logic to the Sterling flash crash of 7th October 2016 we can make similar connections between the JPY currencies (they were certainly taking a hammering well before the crash vs the base currency)
So what’s the moral of the story here? No they can’t be predicted, but don’t ignore the overall trend, any trend following trader who had a bias would have been short on a reasonable timeframe and therefore in the direction of the [mini] flash crash - the higher the time frame, generally, the more stable and less erratic price volatility will be when carrying out analysis.
If you’re interested here is the report on the Sterling flash crash of October 7th 2016 from the Bank of International Settlements (BIS) - there will be lots of similarities that we can pull from this that will apply to the most recent JPY move.
GBPUSD Flash Crash Report 07_10_2016.pdf (548.0 KB)
I’d recommend this if you want to understand the logistics of a flash crash, contributing factors, the ‘perfect storm of mistakes’ that cause a crash and also highbrow data analysis that will give you a step up from all the hearsay