Author: Taiki Maeda, Founder of HFA Research; Compiled by: Felix, PANews

Many people know that Darryl's account on Crypto Twitter/X is @0xENAS, and he shares his trading insights and market views every month. He is one of the best crypto traders, but his journey has been bumpy. After nearly going bankrupt in May 2021, he managed to become an investor and build one of the most prestigious funds in the field. Recently, Taiki Maeda, the founder of HFA Research, interviewed trader Eugene Ng Ah Sio, and the following is a transcript of the interview.

For those who are not familiar with you, can you share what you are doing now?

I co-founded a multi-strategy investment firm called Tangent, where I focus on liquid markets, while my partner Jason is responsible for venture investments. I was previously the head of Defiance Capital, and I entered the crypto space as a retail trader in 2020, and have grown a lot since then.

You are now a very successful trader, but it seems you encountered some issues in 2021. Can you share your mistakes and the lessons you learned from them?

In early 2021, I did not hedge my risks and used leverage aggressively. I took profits in February, but re-entered in March and could not avoid the market crash in May. Due to excessive risk exposure and using leverage to buy the dip, I suffered an 80% drawdown at the worst time and was forced to liquidate my core leveraged positions at the bottom. It was brutal, but it taught me the most important lesson: survival is the priority.

I chose to take the loss and start over. A major mistake was having an overly concentrated position in a single DeFi protocol that did not recover after the market downturn. No matter how strong my conviction was, that loss made me realize the necessity of diversification.

The key is to stay in the "game." No single trade should bankrupt you. Adaptability, risk management, and learning from mistakes are the keys to long-term success. Even today, minimizing the risk of ruin is the most critical factor when determining position sizes.

How has your trading style evolved?

First, it's about positioning - finding asymmetric opportunities with huge upside potential. The harder part is identifying them in real-time. It comes from experience, repeated trials, and cultivating instincts.

For me, crypto trading is still an instinct. When I see a new opportunity, I usually get a gut feeling within minutes, and over time, I know my initial instinct is often correct. Looking back, I try to analyze what triggered that instinct - what specific factors made me so confident in an investment. This pattern tends to repeat. While the markets are constantly evolving, the biggest winners often share similar characteristics.

How do you handle the psychological aspect of trading?

This is a huge challenge. In a 24/7 trading market like crypto, you constantly struggle with greed, fear, and the feeling that someone will abandon you. Maintaining a clear head is crucial, and I even sometimes completely stop trading for two to three days to adjust my state.

An important lesson I've learned is that you can't catch everything. You have to accept the reality of missing out on some opportunities. I stick to my areas of expertise. Recognizing your strengths and ignoring distractions is crucial for long-term success. As GCR once said, "The man who chases two rabbits catches neither."

How do you approach position sizing?

I believe in concentrated positions. Sometimes, 80% of our portfolio is invested in the top 3 ideas. The key is to align your portfolio with your highest conviction bets, ensuring the size matches your belief. Of course, this also means you need strict risk management to avoid catastrophic losses.

How do you reconcile the desire to mitigate risk with the desire to achieve outsized returns?

This is a dilemma. In the first cycle, I took massive risks, like allocating 80% of my net worth to a single asset. While it may seem absurd in hindsight, this boldness brought outsized returns. Now, as a second-cycle investor, I'm more cautious, but I still ask myself: what was it that made me take those big swings before, and how can I replicate that without being reckless? The challenge is to take risks without losing the conviction I had before, while still maintaining a realistic attitude towards market volatility.

In 2021, you allocated 80% of your net worth to AVAX. Looking back, would you make the same decision if you had the chance?

This is a difficult question to answer. In hindsight, it seems absurd, but that risk-taking allowed me to achieve significant compounded returns. Today, I ask myself if I could do the same thing again. As I've matured, my awareness of risk has grown, and I have a completely different system and framework to prevent myself from making such a major mistake. Back then, I was still naive, and I felt that this mindset played a huge role in the previous cycle's success. Recognizing risk is important, but being willing to dream when the market presents opportunities is also crucial.

So, you're saying your investment approach is more cautious now, but you're still willing to take similar levels of risk to achieve outsized returns?

Exactly. Although it's daunting, making large, concentrated bets is crucial to generating the best cycle returns. It's difficult, but this is the source of the best cycle returns. You have to be willing to take these risks, even if they make you uncomfortable.

It sounds like you've developed a lot of disciplined habits over the years. Can you share a bad trade you've made and what you learned from it?

I'm just a regular person, and I always make mistakes. The most recent one that stands out to me is when I heavily went long on SOL at $210, without adhering to a $200 stop loss. The most important lesson in trading is to set stop losses and execute them. Once you get careless, the mistakes can become much more dangerous, and the risk you end up taking can far exceed what you planned at the start of the trade.

What would you say to yourself in that situation?

I would ask myself, "If you were to sell your entire portfolio today, would you buy the same assets in the same proportions?" Most people realize they wouldn't, but they still hold on to the bad positions out of stubbornness. Additionally, opportunity cost is important - every dollar in one asset is a dollar not invested elsewhere.

Another thing is to avoid the "one trade to make it all back" mentality. This is a common trap. Don't trade revenge, but focus on accumulating small wins.

How do you know when to reduce your positions?

This is the hardest part. Many people hold losing positions because of emotional attachment or just hoping things will turn around. But the key is to be honest with yourself. If you re-evaluate your thesis and the situation hasn't improved, it's time to move on (take the loss). This is a dilemma that many retail investors face.

How do you ensure your biases don't affect your judgment?

Having a team definitely helps. In my company, we make everything transparent, so when I do something questionable, people can point it out. Accountability keeps me in check. We do rigorous and often brutal post-mortem analyses on every major decision we make, and we encourage everyone, including new hires, to actively and ruthlessly point out flaws in the "more senior" members of the company. The market doesn't allow for self-delusion, and building a team committed to thorough honesty without emotion is crucial. If you're on your own, find someone to share your positions with and get feedback. It helps mitigate emotional decision-making.

So, accountability plays an important role in maintaining focus?

Absolutely. Having a team or a trusted person to discuss trades with can ensure you don't get stuck in a rut when things go wrong. If you make a mistake, the important thing is to accept it, move on, and not let it drag you down further. Accountability can prevent you from compounding your errors.

What would you advise participants who want to find their own trusted groups or friends?

Many alphas have already moved from Crypto Twitter/X to Telegram and Discord communities. If you're just starting out, Twitter/X is a great platform to build a network presence and share ideas, but today I prefer Telegram as the primary communication medium.

What are the common traits of successful traders?

Successful traders are adept at handling pressure and can make calm decisions when things become unstable. This is not something that can be easily learned - it's an innate skill. If you have it, hone it. If you don't, recognize that and don't force yourself into high-pressure environments. Recognizing your strengths and weaknesses and choosing your position accordingly is crucial.

What are the most common mistakes traders make?

I often see people start fantasizing before anything has even happened. This happens when people get caught up in the idea of "success" because their portfolio has grown, and they start making major lifestyle changes. They think the paper money is real money, and they go out and buy unnecessary things like expensive cars or luxury watches. But the reality is, unless the money is in a bank account and taxes are paid, it's just a score on a scoreboard. I always view cryptocurrency this way - it's a game, and it's not real money until it's converted to cash. When players don't understand this, they often mismanage their wealth and lifestyle.

What are some common misconceptions people have about cryptocurrency?

One of the biggest misconceptions is that you should allocate capital based on fundamentals. People think that if a project has strong fundamentals, the price will go up. But in reality, the market doesn't care about fundamentals 90% of the time. Making money is actually about predicting which narratives will catch on first. Fundamentals are important when there are catalysts, but most of the time, the key is to catch the next trend and make a judgment when you see it. Either way, that's my experience. It's a bit like when you know something is going to happen, it suddenly happens, and you do your best to respond because the market's changes may be faster and further than you expected.

If someone is just getting into crypto today, what would you advise them to do to be successful?

Honestly, if I were to get into crypto today, I would question whether it's worth it. But if you still want to get into crypto, I would say first focus on on-chain assets. They have the best upside potential and can provide the fastest compounding returns for a smaller portfolio. But on-chain opportunities won't last forever - on-chain assets have a certain seasonality, and when the on-chain market opportunities dry up, you'll also need to be able to trade on centralized exchanges. Mastering both of these trading realms is key, but you should focus on excelling at one and being proficient at the other, not trying to do both at the same time.

What are your personal goals for the next 10 years? Do you see cryptocurrency as just a means to an end?

First of all, I really enjoy this "game". Competing with the world's best traders and investors is a major reason I'm in this industry. Over the next 10 years, my goal is to build the best proprietary crypto fund. Looking further ahead, my goals shift towards the stars. I've always dreamed of contributing to making humanity a spacefaring species. A big part of that is supporting space exploration to the best of my ability. One of the items on my bucket list is to go to space before I die.

So you see cryptocurrency not just as wealth accumulation, but as part of a broader vision?

Exactly. There has been a lot of talk about the mission of crypto, no need to reiterate that here. Beyond that, for me, cryptocurrency as a platform for achieving extraordinary wealth also gives us the opportunity to compete globally. I want to leverage that success to support larger causes, like biomedical research, space exploration, and environmental protection. At my company, through personal investments by myself and my co-founders, we've actually invested in robotics, biocomputing, home cancer detection, and other frontier technologies unrelated to crypto. Sometimes these founders are even crypto pioneers, or crypto-curious. It's all interconnected.

What advice would you give to someone who wants to be successful in the crypto space today?

My mantra is simple: "Live, laugh, long-term." "Live" means taking care of yourself and enjoying life while you're young. "Laugh" means appreciating your current position and making the most of every moment. "Long-term" means having patience, understanding when to allocate resources, and knowing where you want to contribute. If you have this mindset, you're not just contributing to society, but contributing to it in the long-term. That's how you succeed, not just in crypto, but in life.