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English Translation

lit.: making a notch on the side of the moving boat to locate a sword that has been dropped overboard
fig.: an action made pointless by changed circumstances.

Breaking it down

1. 刻: carve
2. 舟: boat
3. 求: save
4. 剑: sword

Source: Google Image Search

Story in Chinese

战国时，楚国有个人坐船渡江。船到江心，楚人一不小心，随身携带的一把宝剑滑落江中，他赶紧伸手去抓，可惜为时已晚，宝剑已经落入江中。船上的人对此感到非常惋惜。
但那楚人似乎胸有成竹，马上掏出一把小刀，在船舷上刻上个记号，并且对大家说：“这是宝剑落水的地方，所以我要刻上一个记号。”
大家都不理解他为何要这样做，也不再去问他。
船靠岸后，那楚人立即在船上刻有记号的地方下水，去捞取掉落的宝剑。楚人捞了半天，始终不见宝剑的影子。他觉得很奇怪，自言自语地说“我的宝剑不就是从这里掉下去的吗？我还在这里刻上了记号，现在怎么会找不到呢？”
听他这么一说，那些人纷纷大笑起来，说道：“船一直在行进，而你的宝剑却沉入了水底，不会随船移动，你又怎能找得到你的剑呢？”

Source: baike.baidu.com

Story in English

In the Warring States period, there was a man from the Chu country who passed a river by boat. During the crossing, his sword fell into the river. He quickly reached to catch it, but it was already too late. The people on the boat all felt sorry for him.
But the man seemed to have a plan, he quickly took out a small knife, and made a notch into the boat's side, whilst saying to everyone: "This is where the sword fell into the river, thus I make a mark to remember it."
No one understood why he did it, but they also posed no further questions.
As soon as the boat reached the shore, the man immediately dived into the river where the mark on the boat was, in order to search for his sword. He searched for a long time, but couldn't find it. He found this to be very strange, and wondered "Haven't I dropped my sword from this exact place? I made a mark here, but why can't I find it?"
When the others heard this, they bursted out in laughter and said to him: "The boat is constantly moving, and the sword fell to the river's ground, it did not move with the boat, how can you then find it?"

Translation by Celine Li

Usage

时势已变，刻舟求剑只会成为前进的绊脚石。