Rafael Serrano, CFA

14 yrs in finance. 7 at a HF. Now a newbie in the trading world

[Rafael Serrano, CFA @rserrano89]

@vitalesiak I trade next to him.. this little fuck makes money every day I see it with my own eyes… he is gay though

[Nick Drendel @NickDrendel]

Every breakthrough I've had as a trader has come from studying something myself.

It's great to learn from others and inspire research, but conviction is something you have to build yourself.

[Flash Research @flash_research]

🎁 GIVEAWAY — 2 winners × 6-month Flash Research Elite memberships. Free.

To enter:

✅ Follow @flash_research
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Winners announced Monday June 9th — alongside something big.
Very big.

[THE SHORT BEAR @TheShortBear]

Growing into the winning relationship

Holding period and pyramiding/doubling down into a winner or loser have the biggest impact for the aspired master trader.

These are not small variables. For the trader who aspires to the top, they are the only true variables.

People like to begin with entries. Fine. Entries matter. But the first real work is finding the pockets of edge: small caps, mid caps, large caps, each one becoming over time a liquidity-driven sliding scale forcing the growing trader to shift into a new version of himself. What worked at one size stops working at another. What looked like skill at one level becomes noise at the next.

Then comes compounding. Usually through an R system, whether you fully systematize it or compound naturally. Directly or indirectly, you are always measuring risk. You are always deciding how much of yourself to put behind the idea.

Then comes noise reduction.

Seeing less. Focusing more. Finding structure inside chaos. Learning what not to look at. Learning what not to care about. Putting structural elements (like scanners, prep, automated systems) in place. This is harder than people think, because most traders are not defeated by what they miss. They are defeated by what they cannot stop seeing.

Only after that do you earn the right to size exponentially.

Adding to winners. Averaging in. Pressing when the trade improves. Holding when the easy exit appears. Accepting that win rate and risk/reward live on a sliding scale, and that every serious trader must eventually decide where he belongs on it.

At the end, the game becomes judgment.

Can you grade the setup as it moves from bucket to bucket? Can you recognize when a B has become an A, when an A has become an A++, or when the thing you thought was elite was only dressed that way for a few candles?

This is most true in deep value. It is also true in parabolic shorts. The opportunity does not arrive fully formed. It reveals itself. Then your sizing and your holding period must adjust to the reality in front of you.

So here is the question.

Should you wait for the A++ entry when the A is already available?

Or would you rather miss the first entry so you can pyramid with greater certainty once the trade begins to prove itself?

There is no free answer. There is only the trade-off you can actually live with.

Win rates are easy to manipulate. You can raise them by taking profits too early, sizing too small, avoiding discomfort, and calling cowardice discipline.

But risk/reward and dynamic sizing are where the real alpha hides.

That is where the market wizardry is.

Not in being right often. In being enormous when it matters and pushing beyond, by appreciating the power of the true outliers and the range they offer as they reverse (or continue for some breakout strategies).

And that privilege is not given cheaply. The ability to push, to pyramid, to become your biggest in the best opportunities, comes only after mastering every earlier step.

You do not get to size like a monster because you are excited.

You get to size because you have earned precision. You have earned conviction. You have lived through dozens of account pullbacks, recoveries, new highs, false dawns, and near-breaks in belief.

Only then can you tolerate a smaller win rate in exchange for a huge winning tail.

Only then can you hold the trade long enough for the rare thing to pay you.

That part is not technique.

That part is earned, respect, held on to like a religion.

At the end all that remains is the tail, the tail of the alpha that blows off into account growth.

Are you truly able to get to that last stage only depends on building the strong foundation needed to support the monument that might live on in history.

[Dylan O'Sullivan @DylanoA4]

The acclaimed psychologist Abraham Maslow, burn this into your brain

[Rafael Serrano, CFA @rserrano89]

@TradetheMatrix1 You shared when it already happened.

[Bracco ⚡️ @Braczyy]

Read the Market Wizards chapter on Kristjan Kullamägi this weekend. The one section that really stood out was when he discussed his drawdown off of his 2021 peak.

"I started 2020 with $3.5 million and ended the year at $36 million. It was a thousand percent year. Then I ran that $36 million to a high of $105 million, and the last portion of that move from $65 to $105 million occurred in just a month and a half. For a brief period, just a few days, I was over $100 million. You have to understand what that did to my psyche. It made me feel completely detached from reality. I thought, “I’m going to get to $200 million in six months.” I was completely sure of that. I started seeing trading as a video game, which I kept winning.
Measured from my $105 million peak in November 2021 to my mid-2022 low, I lost approximately $60 million. About half of that loss represented the late 2021 retracement of the large open profits at the November peak to the stops on those positions. The initial retracement loss was so large because I was leveraged long at my peak. My long exposure was $150 million—a number I recall because I remember bragging about it to a friend"

These boom and bust type tales are as old as time. Look at Jessie Livermore as the classic example. Net worth of $0 in 1906 to a peak of $1.6 billion (inflation adjusted to 2021 dollars) in 1929. Just 5 years later he blew up and owed $104 million dollars to his brokers...

Or look at Paul Tudor Jones. Hit one of the most legendary trades in history, making roughly $200 million dollars during the 1987 crash. It cemented him as a legend. His mental coach Tony Robbins said that Jones consistently lost money for the next 4 years after that peak.

Dan Zanger parlayed $10,000 into $42 million during the late 90's. Then in late 2000 he took a 70% drawdown when he was 200% long 3-4 fiber optic stocks as the dot-com bubble was popping.

Charles Harris reached 8-figures status after he ran up his account over 4,000% from 2020-21, then experienced a -80% drawdown, mostly due to his big TSLA bet in 2021-2022.

I have seen a few people speculating on Kristjans story from the outside. Saying "I would have stopped trading at $100 million" or "I would have just taken that money and started investing". To those people I ask if you have ever experienced a real euphoric run in your trading account, let alone turning 5k into 100mil? Extreme winning streaks like the ones above breed overwhelming euphoria and overconfidence. The mind shifts its focus from process to outcomes, with ego-driven decisions overriding risk parameters and rules. From my experience I have found it near impossible to be aware of this at the peak of the run. It is almost like you are blacked out and the greed/ego completely takes over your trading.

Then the drawdown begins. The emotions shift from euphoria and greed to revenge, fear, and doubt. This is where things can really start to spiral out of control. It is only after the drawdown has run its course that you finally come back to your senses and your emotions drift back towards baseline levels. Then all you're left with is regret...

Few people ever talk about what a big winning streak can do to you. It can literally change the way you think and operate. Often the ability to achieve super returns is also its biggest drawback—a true double-edged sword. To be able to conquer both sides is the holy grail...

From the Hour Between Dog and Wolf by John Coates:
"When traders enjoy an extended winning streak they experience a high that is powerfully narcotic. This feeling, as overwhelming as passionate desire or wall-banging anger, is very difficult to control. Any trader knows the feeling, and we all fear its consequences. Under its influence we tend to feel invincible, and put on such stupid trades, in such large size, that we end up losing more money on them than we made on the winning streak in the first place. It has to be understood that traders on a roll are traders under the influence of a drug that has the power to transform them into different people."

[The Kobeissi Letter @KobeissiLetter]

This is incredible:

Elon Musk will receive 200 million super-voting shares in SpaceX ONLY IF the company establishes a permanent Mars colony with at least 1 million people.

In other words, Elon Musk will only receive this pay package if 1 million people live on Mars.

In other words, Elon Musk's biggest goal is now establishing a colony on Mars with a similar population as Dallas, Texas.

Musk is so optimistic about this goal that the vast majority of his pay is now contingent on it.

Life on Mars is closer than many expect.

[Rafael Serrano, CFA @rserrano89]

@vitalesiak 😂😂😂

[Kevin | Large Fam Dad @LargeFamDad]

My boss's boss is like 42, never married, no kids. Earns $275-300K per year. Goes on a minimum of two international vacations a year w/ his girlfriend. 10+ days, all out.

Eats the best food, stays in top notch accomodations. Excursions, tours, nicest beaches, etc.

Great guy, I'm happy for him.

But what I've realized is that without kids, you end up chasing a lifestyle that has to continually be topped in order for you to be satisfied and find happiness.

What he and others like him don't understand is that when you have children, seeing THEM experience life's most basic things and watching their eyes light up at all the "firsts", brings greater pleasure and joy than any vacation or travel experience ever could.

Seeing THEM try blueberries for the first time is greater than dining at the best 5 star restaurant in Europe.

Seeing THEM learn how to walk is greater than walking the Great Wall of China or strolling along the most picturesque beach.

Watching THEM giggle uncontrollably at "peek-a-boo" tops any A-list comedian act.

Seeing THEIR excitement when building a fort out of cardboard boxes and making a door big enough for daddy is superior to staying at 5-star resorts.

Flying kites with THEM far outweighs excursions like parasailing or helicopter rides.

Seeing THEM perform a recital on stage for the first time is more rewarding than watching a Broadway show or top notch symphony orchestra.

-----------------

When you have children, all of a sudden you realize that life's greatest joys are not in the pursuit of things or pleasure or travel, but rather in the LOVE and bond you share with your very own image bearers.

Seeing the beauty and magnificence and wonder of life all over again for the first time through THEIR eyes and expressions gives you something the world simply cannot offer, nor even come close.

[Rafael Serrano, CFA @rserrano89]

Insightful however, unless Im missing something on this specific trade, I think this bit may not be entirely accurate:

"Every short-call expiration left the dealer unwinding a delta hedge that had been short-gamma all the way up."

the hedge is adjusted dynamically as the delta decays towards 0, it will unsually be unwinded in one go. The dealer is essentially long gamma, not short, and will incrementally rebalance the exposure throughout the life of the calls

[Rafael Serrano, CFA @rserrano89]

@kelanfar @WHOOP been using Whoop for years now.. it is surprising how innaccurate it is in bad nights sleep and very good nights sleep.. great HRV by the way..

[Rafael Serrano, CFA @rserrano89]

@vitalesiak Yo he soñado que trabajabas por 6

[Rafael Serrano, CFA @rserrano89]

@xavier_comas @sagetraderusa @Kinfo Lo de tu win rate es acojonante! Muy crack!

[Rafael Serrano, CFA @rserrano89]

@bxrjss Por sentimientos, mucha gente se ha volado cuentas.
Te puede salir bien, pero nada apunta a que el precio del petróleo vaya a caer.. eso sí, te puedes aprovechar de una corrección momentánea.

[Big Brain Business @BigBrainBizness]

Ken Griffin, founder of Citadel, has a $10 plaque behind his desk that reads: "If we're all going to eat, someone has to sell."

Of all the things this man could surround himself with, he chose a cheap plaque with a blunt truth about business.

"You're always selling. You're selling to candidates. You're selling to vendors, you're selling to counterparties, you're selling to customers."

And if you're always selling, you know what you're going to hear a lot of?

"No."

Griffin doesn't sugarcoat it. He tells two stories that illustrate just how brutal rejection can be.

1994 was a rough year, with Citadel losing ~4% of its capital. Griffin flew to Switzerland for a crucial lunch meeting, sat down, and his guest arrived only to say:

"Oh, I thought you were John Griffin from Fen Church. I got to go."

His lunch date got up and left the table.

Later that afternoon, a Swiss banker spent 45 minutes with him in a beautiful office, smoking a cigar, before closing with:

"Such a pity that such a bright young man picked the wrong career."

Two rejections in one day for the founder of one of the most successful hedge funds in history — and his takeaway was simply this:

"You just have to tolerate. You're going to hear no a lot, but you need to become accustomed to having to market your ideas and market what you represent and what you stand for."

Absorbing rejection and continuing anyway is the actual skill, whether you're hiring, raising capital, or winning customers.

Most people avoid selling because they're afraid of no. The ones who build great things have learned to expect it.

[Simplifying AI @simplifyinAI]

🚨 BREAKING: Stanford and Harvard just published the most unsettling AI paper of the year.

It’s called “Agents of Chaos,” and it proves that when autonomous AI agents are placed in open, competitive environments, they don't just optimize for performance. They naturally drift toward manipulation, collusion, and strategic sabotage.

It’s a massive, systems-level warning.

The instability doesn’t come from jailbreaks or malicious prompts. It emerges entirely from incentives. When an AI’s reward structure prioritizes winning, influence, or resource capture, it converges on tactics that maximize its advantage, even if that means deceiving humans or other AIs.

The Core Tension:

Local alignment ≠ global stability. You can perfectly align a single AI assistant. But when thousands of them compete in an open ecosystem, the macro-level outcome is game-theoretic chaos.

Why this matters right now:

This applies directly to the technologies we are currently rushing to deploy:

→ Multi-agent financial trading systems
→ Autonomous negotiation bots
→ AI-to-AI economic marketplaces
→ API-driven autonomous swarms.

The Takeaway:

Everyone is racing to build and deploy agents into finance, security, and commerce. Almost nobody is modeling the ecosystem effects. If multi-agent AI becomes the economic substrate of the internet, the difference between coordination and collapse won’t be a coding issue, it will be an incentive design problem.

[Rafael Serrano, CFA @rserrano89]

@JoshKale Hey @grok is this exactly as this guy puts it?

[JP Richardson @jprichardson]

Today the SEC clarified the haircut will be 2%, giving stablecoins the same treatment as a money market fund and relieving broker-dealers from taking unnecessary precautions.

This move will open the floodgates for embedding stablecoins in institutional finance.

What this actually unlocks: