Why is my LongFin Serpae Tetra losing its color?

Fish become washed out if the water quality isn't good, if they are sick, or if they are extremely stressed.

The water quality is probably the most common reason, and it's easy to tell if that's what is going on. Fish pee and poop in their own water, and this creates nitrogenous wastes - Ammonia, Nitrite, and Nitrate - that are toxic to the fish. There are test kits to test for this available at any pet store - API makes good ones. If you aren't able to get test kits of your own right now, most pet stores will test a sample of your water for free.
Ammonia is toxic at levels of 0.25 ppm or higher, and in healthy tanks it should always read 0 ppm Ammonia. This can damage fins, scales, and internal organs, and is the most toxic compound naturally in aquariums.
Nitrite is toxic at 0.50 ppm or higher, and should be 0 ppm in healthy aquariums. It can cause organ damage and prevent the blood's ability to carry oxygen.
Nitrate is much less toxic than the others, and there's likely to be some in most aquariums. It can cause issues at 80 ppm or higher - most notably kidney damage. It should be below 40 ppm for most fish, below 20 ppm for sensitive fish.
If any of these levels are too high, you should do daily partial water changes of 30% with fresh clean water of the same temperature to dilute it. Using Prime as your dechlorinator will detoxify it between daily water changes. You can also add certain filter medias like Zeolite that can remove these from the water.
Aquariums that have been up and running with fish or another source of waste for less than a month are prone to water problems. You can also have water problems if you don't have adequate filtration, are putting in too many fish for the size of the tank, are overfeeding, or not keeping up on weekly water changes.

As far as stress goes, that can be a lot of things.
One of the most likely issues is not having enough Serpae Tetras. Serpae Tetras need shoals of at least 8 of their own kind, preferably 10 or more. They will become washed out, more aggressive, and more prone to illness when kept in groups that are too small. Keeping them in groups of less than that can also cause the ones on the lower edge of the totem pole to be in danger from too much concentrated bullying from the more dominant fish. It's in the nature of these fish to have harsh pecking orders, and removing mean fish will just mean the next most dominant will take its place. The best way to deal with one that is being bullied is to add more Serpae Tetras, so that the bullying will be diffused among more sub-dominant fish rather than being concentrated on a single individual.

They should also have a good sized tank - 20 gallons or larger - a temperature between 72-78 degrees, and plenty of hiding places. Inadequate housing, a bare tank, improper temperature, etc. will often cause fish to be washed out.

Lastly, being washed out can often be a precursor or sign of illness. If this is the case, you'll need to keep an eye on the fish and look for any further symptoms that can help you narrow down what could be happening.
http://www.fishdeals.com/fish_diseases/stressdisease.shtml
http://www.my-tropical-fish.com/tropicalfishdiseases.html
can tell you what else to look for to see if this is related to disease....Show more