Are More Stock Market Flash Crashes Around the Corner in 2012? - By: David Wider

First and foremost, we need first to understand what it means by a stock market crash, and it seems the definitions available are quite too technical that are just simply beyond the comprehension of the lay people. For stock traders, especially the newbie’s, it is relevant that this is deeply understood as this could very well affect the direction of their careers in a split second event. Stock market crash technically speaks of sudden and abrupt points losses of stock index across the stock market.

The said stock market crashes are purported to be perpetuated by individuals and organizations that would benefit from such an event. They are highly regarded as powerful and influential given that they could organize a series of stimuli leading to a stock market crash. However, that is already beside the point as there is no hard evidence that will substantiate such a theory, and for some this is just one of those ridiculous conspiracy theories. Stock market crashes are seen as the consequences of the unpredictability of the economic situation within the given time. Most stock market crashes that have been witnessed several times over are observed to have an element of fear to have caused such a phenomenon.

Panic is what actually induces stock market crashes. It is when people collectively and simultaneously feel the precarious economic state, seen through the perspective of fear, will opt for panic selling of huge and large amount of stocks resulting to a market crash.
What happened in 2010 was not an ordinary stock market crash because it was in fact a flash crash, which means the crash happens in a matter of minutes. Fortunately, right after the crash, the stock market was revived and was able to score a recovery within the day. Now there could be various economic factors that lead to stock market flash crash. One of these is information. Once information is sabotaged to incur panic, the stock market could be in such a chaotic whirlwind, sending mammoth economic consequences. This is the kind of stock market crash that is feared to repeat within the year 2012. Experts have argued with differing opinions and views about flash crashes from ever happening by this year, each with convincing proofs of the predictions.

The most positive traders would not hope to see it coming, but there should be no place for complacency. Careful planning should be crafted in case of inevitabilities. A trading software developer could very well explain the benefits of securing trading software. It is his job to come up with a program to help manage the risks involved in such an event. A trading software developer exactly knows how to deal with consequences involved, as it’s his foresight that will help create a program to help the traders come through a flash stock market crash, whether it will happen in year 2012 or the years after that.

About the Author

David Widerhorn Consulting is a technology consulting firm focused on providing state of the art technological solutions that address financial services client’s complex and dynamic business needs.

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