Success is Not Final, Failure is Not Fatal: Trader’s Journey

success and failure trading

“Success is not final; failure is not fatal. It is the courage to continue that counts’”

Winston Cruchill

This is one of the most popular quotes by Sir Winston Churchill, the revered British Prime Minister.

Over the years, the quote has been applied well across all areas like finance, education, business, and technology. But it can be applied in every area of our lives.

But, as you know, we are interested in the financial side. That’s why we’re going to look at how this quote fits well for day traders and investors, becoming crucial from a career perspective.

What does success is not final, failure is not fatal mean?

The quote “success is not final, and failure is not fatal” is quite straightforward. It means that when you achieve success in anything, you should not end there.

Instead, you should work to improve your outcome by learning more and working hard to become better at what you do.

The failure part, on the other hand, means that you should not let failing or having a setback bring you down. Instead, you should work hard and smart to learn from your mistakes and adapt your approach.

Most people who are successful went through this learning process. For example, Warren Buffett lost money in his IBM bet while Bill Ackman lost billions of dollars when his investment in Valeant Pharmaceuticals went awry. 

Instead of giving up, these investors learned from their mistakes, tweaked their approaches, and achieved bigger successes thereafter.

How does it fit in day trading and investing?

Day trading is filled with ups and downs. You should understand the nature of day trading, where success is not guaranteed, but failure/losses are inevitable.

You should embrace the journey, not only the destination of your career. Enjoy the process, learn from every step you’re taking.

In the first part, when you become successful in trading, it should not end there. Use this success as a learning experience to improve your outcome. 

For example, if you are good at trend-following, you can learn other related strategies like reversals, scalping, and pairs trading. Besides, being good at three strategies is better than one. 

In this case, your trend-following expertise will help you make money when stocks are moving in a well-defined trend. Your scalping expertise will help you achieve success when stocks are in a consolidation phase.

The failure part is also relevant in trading and investment. For example, if you fail in a certain strategy, it means that you can try another trading approach (or reboot your actual one) and achieve success. Also, if a trade goes south, it is possible to make profits in other trades.

Taken together, this quote means that trading is a journey with good and bad days. It will never be a straight path, regardless of how successful you are. Some of your trades will be profitable while others will not. 

Therefore, you should embrace the journey and not the destination. When your trade is profitable, learn more about it and move to the next one. Similarly, if your trades are not profitable, work to improve your future ones.

Related » A 100% Win Streak? Doesn’t Exist

Success in trading is not permanent

Let’s go a bit deeper. The first lesson to learn from this quote is that success is not permanent and anyone can go through challenges.

A good example of this is Pierre Andurand, who is one of the best-known oil traders in the world. 

In 2023, his hedge fund posted a -58% return, making it one of the worst-performing hedge funds. Before that, he generated 59% returns in 2022, 87% in 2021, and 154% in 2020. 

This goes to show that no one in the financial market is immune to these challenges. Bill Ackman, who has become a highly successful hedge fund manager, went through a rough patch in 2016, 2017, and 2018 as he recorded major losses.

The same happens among day traders. In this, you will never have a straight path no matter how successful you are. Really, That’s impossible. Because it is the nature of markets to be unpredictable.

Therefore, you should adapt to new market conditions and learn new things as you go. Focusing more on your success could trigger a situation known as overconfidence bias.

Overconfidence bias is a situation where people overestimate their abilities, judgment, and knowledge in a field. It can lead to poor decision-making and lack of growth in the market.

There is another problem that arises if you forget about this: greed. Believing that you can easily predict the movement of the markets will lead you to always want to generate more profits, degrading the quality of your analysis.

And the consequences might be catastrophic for your account.

Failure is not final in trading

No one likes failing and failure can lead to a major toll on someone. In most cases, it can lead to stress, displeasure, low confidence, and bad judgment. In short, your mental balance is the one that can suffer the most.

Failure can also lead to major mistakes. For example, if a trade goes south, it can lead to more mistakes as you try to recoup your losses triggering revenge trading.

There are two main ways in which you can experience failure as a day trader. First, a strategy that you worked so hard for can fail or generate unsatisfactory returns.

Second, you can go through a prolonged period of underperformance in the market. Even the best investors experience such events. As mentioned above, Bill Ackman made substantial losses for three years straight.

Using this quote, you should learn that failure is not final. Failing to do that can lead to substantial losses and mental issues. Risk, uncertainty and losses are part of the game, and you need to deal with them.

In some cases, people have become stressed and depressed because of their historical failures. Also, it can transition you into a loss-averse trader, who fears taking risks in the market. As a result, it can lower your profit potential over time.

Remember this, always: losses are your biggest chance of growth! Of course, you have to deal with them in the right way.

How to boost the ‘courage to continue

Continuous learning

The best approach to use this quote by Winston Churchill effectively is to embrace continuous learning. Focus on learning new things no matter how successful you are in the market.

For example, if you are experienced in trend-following, you can gain more experience and expertise in scalping.

Similarly, if you experience failure, learning can help you handle the situation. If you failed in using the moving average, you can become successful by using the VWAP indicator. Similarly, if you fail in scalping, you can learn and succeed in trend-following.

You should also learn more about the market, new trends, and new technologies.

Building resilience

The other way is to build resilience in your day trading. Resilience is defined as the ability to recover or withstand quickly from difficult experiences.

Knowing the quote can help you build resilience by taking every situation positively. When you generate substantial losses you know that it is not final and that you can work to improve the situation. 

Perseverance

In addition, it is worth noting that trading is not a 100-meter dash. Instead, it is a marathon, which is always longer. All experts in short-distance running rarely make it in marathons. Also, experts in marathons know how to manage their pace with the goal of winning.

Therefore, you should always have a long-term horizon when day trading. If your initial pace is not good, you have room to improve it. Consistency is one of the key factors in achieving success in a trading career.

Optimization loop

You need to constantly work on your strategy, even when things are going well. This may seem redundant, but as we have already said many times, the nature of financial markets is ever-changing.

And anticipating a change, rather than having to chase it, is the best way to go. Do not remain in the status quo and do not be afraid to expand your comfort zone.

Another way to apply this quote is to adapt to fast-moving trends in the market. It is not uncommon for a stock to fall by over 10% in the pre-market and then close up by 5%.

In many cases, the Dow Jones will fall by 1% in the futures market and then recover during the regular session. Therefore, you should work to be adoptive of these market conditions.

There are other things that will help you embrace failure and work on your success in the market. Some of them are being disciplined, having a mentor, working as part of a team, and working constantly to improve your trading strategy.

Summary

This quote is one of the most powerful ones that day traders and investors should learn since all of them will experience success and failures.

Taken together, some of the top things that will help you succeed are having a trading plan, using the best risk management strategies, having a mentor, and always using a journal.

A trading plan is a holistic document that illustrates all details of your trading strategy. It shows you when to execute a trade and how to exit.

Risk management includes using tools like a stop-loss and a take-profit. A mentor, who has been there and done that, will guide you through the learning curve.

External useful resources

  • 10 Trading Quotes to Help Get Your Head In The Game – Babypips
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