It depends. A typical ‘flash crash’ lasts about 15-30 minutes. A real sell-off based on the outlook for a sector takes place over days or weeks. An example of this would be the oil stocks in the first 6 weeks of 2016 - sure, oil went below $30 a barrel, but an integrated major like XOM can still make money, and it was entirely irrational to dump stocks like MPC, since refiners gain from low oil prices.
I had enough oil stocks already, so I bought IP during this crash - dirt cheap.
Wouldn’t Capital gains taxes negate your winnings, er, earnings?...............