Understanding the Value of Failure - Bulls on Wall Street

Understanding the Value of Failure

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Self-worth is often measured by the sum of accomplishments. This is why failure can burn badly. Not only is a goal or project left unsatisfied, but your sense of self-worth feels compromised as well.

 

Well beyond the whole glass-half-full/glass-half-empty scenario, failure can actually be the largest impetus to success. Success is fun and safe. Uninterrupted success can also lead to stagnation and risk adversity.In business companies that enjoy years of success and growth–without at least a few years of serious financial trouble–almost always fall victim to their own strengths.  You see companies like Microsoft that come out hot out of the gates with no setbacks they fall victim to their own success and stagnate vs Apple who had some serious trouble in their original business model had to innovate and reinvent themselves.   In the field of day-trading, limiting yourself to safety and avoiding all risk reduces your income potential. Since markets are constantly shifting, this is also not a field where adversity to change is helpful. Failure will often open one up to change better than success.

 

Understanding the value of failure and, more importantly, not fearing failure, supports personal growth and profit potential. Failure can morph into success if it’s taken in a nonpersonal and productive approach.

 

Failure ends resistance to change

 

In times of success, the old ways stay strong. There’s no reason to change because the current methods are working so far, and income is coming in.

 

In day-trading, proven methods are good but they don’t always remain successful. It’s important to avoid stagnation for that reason. Reviewing strategy and changing methods is part of this trade. At some point, you’ll have to change anyway. But those most resistant will actually not consider change until that point where methods fail. When I started this business in 2008 I strictly traded smallcap stocks. I traded every type of crappy 2-3 dollar stock possible. What I found was that trading that way wasnt scalable for my account or my business. Its hard to have a chatroom where your trading these small junky stocks and its hard for someone who now has a much bigger account to get size in these stocks. During these times I was making 400-500 dollars a day and had 30 subscribers as this style just wasnt a good one for me or my subs. Trading this way limited my results in many ways.  Today I trade mostly momentum Nasdaq type of stocks 20-100 dollar stocks with volume and range. Changing my method allowed me to get more size into my positions but also move faster and more aggressively. This changed my profits 10 fold.

 

This is where failure becomes helpful. You can no longer resist change, and the recent failure opens the door to further exploration. Any new ideas that you were afraid to try before can be tried now out of necessity. It breaks up your routine and forces you to grow beyond proven methods.

 

Change not only involves trying the new methods but also involves corrections to stay on target. Long-accepted strategies are now questioned, and after a hard look at what led to failure, you can see where you can improve your approach.

 

Change is inevitable and, in failure, it becomes necessary. You become less resistant to change, which in the future leads to less risk adversity and a more open-minded approach to your methods.

 

Failure reveals both strengths and weaknesses

 

Many successful people failed first before succeeding. From those failures, they learned more about themselves, what they really wanted, and better paths for success.

 

It may simply be that there are some types of day-trading investments you have a better handle on than others. Or you made an “educated” guess on bad information or require more skills training to reduce the likelihood of bad decision-making. Through failure, you learn your shortcomings, and your strengths also come to the surface through this self-examination.  This is why I have my students trade for sometimes months on a simulator while we grade their trades. So that they can rise and fall! So they can have terrible days and amazing days and feel the ups and downs of trading.  Then after each failure and each disaster we reformulate and learn lessons getting them ready to trade live

 

The foremost lesson that can come from failure is your ability to survive it. Sometimes knowing that fear is survivable and leads to better accomplishments is the best way to stop fearing it and encourage future risks. When I get up and get ready to attack it in the morning I have such a confidence as I have been on the otherside. Desperate and wondering if I was going to make it in business and in trading. In my younger days I blew up 5 different trading accounts.  I once had 400 people in my chatroom  when my partner left and took them and lost them all down to 20 people! Going all the way to edge and coming back gives me my strength.

 

Failure means never asking “What if?”

 

“What if?” is that great unanswerable question that haunts people until death. In it, there are regrets and wonders that will never be answered or satisfied. By its nature it is always unsatisfied.

Failure may result from taking risks. You make a trade with a 50-50 chance of being good, and instead it goes bad and you lose money. At the time this occurs, you may feel devastation and wish you never took the risk.

But imagine if you never took the risk. That question will likely haunt you too. You’ll never know what may have come from that risk. It could have been a very profitable trade, or it could’ve tanked. Either way, you don’t have a strong answer, and you’ll always wonder.

 

Sometimes, instead of the constant nag of “What if,” the answer of “I tried, but it didn’t work,” is often better for the simple reason that it is an answer. You tried, you did your best, and it wasn’t successful. But at least you know, and you can let it go and move on. It doesn’t haunt you like unanswered questions. You can even feel a certain “badge of honor” that you acted bravely and didn’t hold back due to fear. In trading whether you win or lose money is meaningless. Our jobs is to do the right thing to trade a stock well. That often means that you do the right thing and you lose on a trade. And sometimes you will do the wrong thing and make money. But longterm if you want to make serious money and do it each day your job is to trade each stock well with probabilities and risk irregardless of the dollars or your p&l.

 

Builds character

 

This sounds very cliché, but it’s true.

 

As stated earlier, success often preserves the status quo. It feels good but demands little from you. Failure, on the other hand, makes you examine those uncomfortable questions that lead to growth.

Coming out of failure, you’ll find you’re more resilient and mature. Failure is no longer frightening because you survived. Also, you’ll be more forgiving toward yourself and others in the same position. Perhaps you can even encourage those facing similar failures or shortcomings. Patience will grow, and you’ll no longer take shortcomings as personally.

 

You’re the sum of a whole picture in which accomplishments are one part. Success or failure doesn’t define you, as they’re merely results of events in your life. Failure can be devastating, or it can be a learning opportunity.

 

In the light of failure, regroup and remove the personal connection to it. From that place, you can make a new beginning with new risks, new challenges, and new methods of continuing your trade.  Your struggles can define you. Handle it right and it will give you an amazing power to make things happen.
if you guys are having any trouble with your trading or anything else always feel free to email me kunal@bullsonws.

5 thoughts on “Understanding the Value of Failure”

  1. Kunal, Your writing is eloquent, insightful, and powerful. I agree with every word you have shared. Some how it seams you always address the perfect topic for what I’m going thru, or recently gone thru. I love a 2 word statement you used “Builds Character”. I hope sharing my experiences will add in helping anyone dealing with failure.
    I’ve had the honor, and privilege of learning from the best. As a young man working 3 jobs, I was told by the President of my Fathers Company as the 3 of us discussed my struggles. As he chuckled at the adversity in my life and said “It builds character”. I didn’t fully understand, or appreciate the meaning of his words. Almost ten years later and 2 failed attempts at business, my spirit, and confidence broken. I had all but given up on myself. My Father shared his experience with failure before becoming the owner of 16 trucking companies serving the entire midwest. He then said “Son you will only have failed if you give up. Learn from your mistakes and experiences, pick yourself up, and try again.” Five years later I opened a small retail floor covering store. The fire inside me to be successful burned as hot as the Sun. Upon the opening of my store I felt if I could get this little store to do 1 million dollars in annual sales I would have maxed out its full potential. Five years later Prima Tile & Carpet was doing 6 million in annual sales. What a feeling to come from the depths of depression, and failure to being a millionaire. Ten years later and the toxic mortgage crisis, real estate bubble bursting, stock market crashing, and credit markets freezing up. I again found myself struggling with “failure”. After losing everything I took what little money I had left and thru an acquaintance I joined a local prop trading firm here in S. Florida.
    After a couple months of frustrating training, another acquaintance told me about this amazing guy that had a company called Bulls on Wall Street. After researching Kunal and his team at BOWS I enrolled in the Boot Camp and became a Platinum member. As any member of BOWS knows there is absolutely no other company that offer the education, and support that BOWS does. I have struggled terribly with the psychology of trading. Kunal and the BOWS team have gone ABOVE & BEYOND anything expected to ensure my success. That being said, I still lost 90% of my fund allocation. The upside to it all is in the basics of Kunal article. So with the remaining 10% of my allocation I am rebuilding, and I will succeed as a trader. The passion I have for trading burns as hot as the Sun, I have made the mistakes necessary for me to learn how to succeed. I’m determined to continue to learn, and put in the work necessary.
    If you are lucky enough to have found BOWS, and smart enough to have joined BOWS. Your in the right place and have all you need to succeed as a trader. I’m not suggesting it will come easy (I suppose for some it does). Remind yourself that Out of great adversity comes great success, and that WINNERS NEVER QUIT, QUITTERS NEVER WIN.
    Good Luck to all, and a Hugh Thank you to BULLS ON WALL STREET!

  2. Hey Kunal,

    This is great stuff, and the way you take it head on and teach everyone to deal with it is one of the things that completely sets BoWS apart from the vast majority of training out there. Trading patterns and techniques are tools, but what really makes or breaks the bank is how we handle the mental and emotional side of trading (and life, actually).

    One of the “tricks” that sometimes helps me is to plan for failure. Not in the sense that I plan to crash and burn, but I plan for things not to go well (or even really, really badly). I started trading with $6,000 in my account, and I actually PLANNED to lose it all in the learning process (yes, I planned to blow up my account!) I lost almost $2,000, but because I planned to lose more, I was happy that’s all I lost – I viewed it as an investment in education (and I learned a TON). This gave me enough perspective to look back and see what I needed to improve – and that helped me find BoWS to teach me what I was missing.

    Everybody wants to be the 1 guy out of the thousands of students BoWS has trained that understands everything immediately and doesn’t ever lose money – I want to be the rock star! But whether you plan to lose money or not, you will. So if we plan for it, then it’s no longer a loss, it’s an investment.

    I say thinking this way is a trick, because in some ways it is. But it’s not a trick to get around the rules of the market or life – it’s a trick to get my ego and my brain to accept reality, which gives me the perspective to look back at a losing day and honestly view it as an investment. This kind of trick helps us figure out our mistakes and work to correct it tomorrow (without screwing up because we’re pissed at ourselves for “failing” yesterday).

    So for anyone else out there who shares my problem of having “too many” losing days/trades, my suggestion is to stop losing and start investing. Your account won’t look any different at the end of the day Monday, but you’ll be able to learn from it better so it will look better at the end of the day Tuesday.

    Happy trading!
    (Which means we need to have fun with this stuff, even when we screw up!)

  3. Success is a paradox; you must see losses in order to achieve gains.

    Our greatest enemy in this game is ourselves. Sometimes, our egos, high-expectations, and perfectionism-complexes impede our ability to trade. Regardless of impressive high achievements made in the past, all bets are off in the stock trading game. You cannot take failure personally – it happens to the best of the best (past, present and future). No one is invincible. When encountering failure, you can either serve your ego by pouting and allowing yourself to be consumed by discouragement, or you can serve your wallet by using your time to go back to the drawing board and working your ass off (versus tending the wounds of your pride and ego).

    The value of this is you will learn what kind of destiny is in store for you and what kind of warrior you are. If you find yourself starting over multiple-times, take comfort in the discovery that you own the determination, the persistence, the passion, the cajones it takes to eventually succeed. When you prove to yourself that you have these qualities, a hidden confidence is lit. Bottom line, experiencing failure gives you an opportunity to see what you are made of. One reward could be you figure out that you and trading is not meant to be – and you move on to next adventure. Another reward could be you realize you are destined to succeed because you have the drive.

    Finding the right trading system is all about trial and error. After concluding a particular strategy is a failure, don’t interpret that as a waste of time and energy. Instead, look at it as you just took a step closer to finding the right strategy for you by eliminating a bad one. For example, say you try shorting low-float stocks, and it results in failure. You now understand that shorting low-floats is not for you. You essentially have gained clues that perhaps, your best interest may be longing stocks and/or playing high-float stocks. Each failure leaves a hint. Take advantage of these clues when you go back to the drawing board and cook up a new strategy to trial and error.
    Eventually, you will find your groove. They key is to keep moving forward until you do. That is one reason why BOWs advocates trading very conservatively when just starting out – to allow traders to benefit from their failures.

    If you are willing to duke it out, you’ll eventually hit your mark and rule the world. Failing blows, but it is worth it in the end game. Kunal, MB, and Szaman are all established proof of this.

    “The world ain’t all sunshine and rainbows. It is a very mean and nasty place It will beat you to your knees and keep you there permanently if you let it. You, me or nobody is going to hit as hard as life. But it ain’t about how hard you’re hit, it is about how hard you can get hit and keep moving forward, how much can you take and keep moving forward. That’s how winning is done!” -Rocky Balboa

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