Host: Taiki Maeda, Founder of HFA Research

Translation: Felix, PANews

Many people know that Darryl's account on Crypto Twitter/X is @0xENAS, where he shares trading insights and market perspectives every month. He is one of the best crypto traders, but his journey has been fraught with challenges. After nearly going bankrupt in May 2021, he became an investor and established one of the most prestigious funds in the field. Recently, HFA Research founder Taiki Maeda conducted an exclusive interview with trader Eugene Ng Ah Sio, and here is the transcript.

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

I co-founded a multi-strategy investment firm called Tangent, where I focus on liquidity markets, while my partner Jason handles venture capital. I was previously the head of Defiance Capital and entered the crypto space as a retail investor in 2020, and I have grown significantly since then.

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

In early 2021, I did not hedge my risks and actively used leverage. I took profits in February, but reinvested in March, failing to avoid the market crash in May. Due to excessive risk exposure and leveraging to buy the dip, I suffered an 80% drawdown at the worst moment and was forced to liquidate my core leveraged positions at the lows. It was brutal, but it taught me the most important lesson: survival comes first.

I chose to cut my losses and start over. A significant 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 at the "table." No single trade should bankrupt you. Adaptability, risk management, and learning from mistakes are crucial for long-term success. Even today, minimizing the risk of bankruptcy when determining position sizes remains the most critical factor we need to address.

How has your trading style evolved?

First, it’s about understanding how to position yourself—looking for asymmetric opportunities with significant upside potential. The harder part is identifying them in real-time. It comes from experience, trial and error, and honing instincts.

For me, crypto trading is still instinctual. When I see a new opportunity, I usually have an intuition within minutes, and over time, I’ve learned that my initial instincts are often correct. Looking back, I try to analyze what triggered that instinct—what specific factors gave me confidence in an investment. This pattern tends to repeat. While the market is constantly evolving, the biggest winners often share similar characteristics.

How do you handle the psychological aspects of trading?

This is a huge challenge. In a 24/7 trading market like cryptocurrency, you constantly battle feelings of greed, fear, and the sense that someone might abandon you. Staying level-headed is crucial, and I sometimes completely stop trading for two to three days to recalibrate.

One important lesson I’ve learned is that you can’t catch everything. You have to accept the reality of missing certain opportunities. I stick to my areas of expertise. Recognizing your strengths and ignoring distractions is vital for long-term success. As GCR once said, “He who chases two rabbits catches none.”

How do you view position sizing?

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

How do you cope with the internal struggle of wanting to avoid risk while seeking huge returns?

It’s a dilemma. In the first cycle, I took enormous risks, like investing 80% of my net worth in a single asset. While it may seem absurd in hindsight, that boldness brought significant returns. Now, as an investor in the second cycle, I’m more cautious, but I still ask myself: what made me take those big actions before, and how can I replicate that without being reckless? The challenge lies in taking risks without losing the conviction I had before, while still maintaining a realistic attitude towards market volatility.

You invested 80% of your net worth in AVAX in 2021. Looking back, if given the chance, would you make the same decision again?

That’s a tough question to answer. In hindsight, it seems absurd, but that risk yielded significant compounded returns. Today, I ask myself if I could do the same again. As I mature, my understanding of risk has increased, and I have a completely different system and framework to prevent myself from making major mistakes. Back then, I was naive, and I believe that mindset played a huge role in my success in the previous cycle. It’s important to recognize risk, but it’s also crucial to dare to dream when the market presents opportunities.

So, you’re saying your investment approach is more cautious now, but you would still take the same level of risk for outsized returns?

Exactly. While it can be daunting, making large, concentrated bets is essential. It’s difficult, but that’s where the best cycle returns come from. You have to be willing to take those 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 made and what you learned from it?

I’m just an ordinary person and I always make mistakes. The most recent one that left an impression was when I heavily longed SOL at $210 without adhering to a $200 stop-loss. The most important lesson in trading is to set stop-losses and to execute them. Once you become careless, the mistakes can become more dangerous, and the risks you take can far exceed what you planned at the start of the trade.

What would you say to yourself at that time?

I would ask myself, “If you sold your entire portfolio today, would you repurchase the same assets in the same proportions?” Most people realize they wouldn’t, yet they continue to hold bad positions out of stubbornness. Additionally, opportunity cost is crucial—every dollar in one asset is a dollar not invested elsewhere.

Another thing is to avoid the mindset of “I can make back all my money in one trade.” This is a common trap. Don’t engage in revenge trading; focus on accumulating small victories.

How do you know when to reduce your position?

That’s the hardest part. Many people hold onto losing positions due to emotional attachment or simply hoping things will improve. But the key is to be honest with yourself. If you reassess your viewpoint and the situation hasn’t improved, then it’s time to move on (i.e., “cut losses”). This is a dilemma 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 conduct rigorous and often brutal post-mortems on every major decision we make, and we encourage everyone, including new employees, to point out issues with the more “senior” members of the company in a brutally honest manner. The market doesn’t allow for self-deception, and building a team committed to complete honesty without emotions is crucial. If you’re alone, find someone to share your position with and get feedback. It helps mitigate emotional decision-making.

So, accountability plays a significant role in maintaining focus?

Absolutely. Having a team or a trusted person to discuss trades with can ensure you don’t get stuck when things go wrong. If you make a mistake, it’s important to accept it and move on rather than digging yourself deeper. Accountability can prevent you from making more mistakes.

For participants looking to find a group or friends they can trust, what would you recommend they do?

A lot of alpha has already shifted from Crypto Twitter/X to Telegram and Discord communities. If you’re just starting out, Twitter/X is a great platform to build your network and share ideas, but today I prefer Telegram as the primary communication medium.

What common traits do successful traders share?

Successful traders are good at handling pressure and can make calm decisions when things get unstable. This isn’t 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. It’s crucial to understand where your strengths and weaknesses lie so you can choose your position wisely.

What are the most common mistakes traders make?

I often see people fantasizing about things before they happen. This occurs when people get caught up in the idea of “success” because their portfolios have grown and they start making significant lifestyle changes. They think that the money on paper 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 the 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 until it turns into cash, it’s not real money. 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 follow. But in reality, the market doesn’t care about fundamentals 90% of the time. Making money is really about predicting which narratives will become popular first. Fundamentals matter when there are catalysts, but most of the time, the key is to catch the next trend and make judgments when you see it. This has been 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 market changes can be faster and further than you expect.

For those entering the crypto space today, what would you advise them to do to achieve success?

To be honest, if I were entering the crypto space today, I would question whether it’s worth it. But if you still want to enter, I would say to first focus on on-chain assets. They have the best upside potential and can provide the fastest compounded returns for smaller portfolios. But on-chain opportunities won’t last forever—on-chain assets have a certain seasonality, and when opportunities in the on-chain market dry up, you also need to be able to trade on centralized exchanges. The ability to operate on both trading levels is key, but you should focus on mastering one level and become proficient in the other, rather than trying to juggle 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 best traders and investors in the world is a significant reason I’m in this industry. My goal for the next 10 years is to build the best proprietary fund in the crypto space. In the long run, my goals have shifted to the stars. I’ve always dreamed of contributing to humanity becoming an interstellar species. A significant part of that is supporting space exploration as much as I can. One of my bucket list goals is to go to space before I die.

So, do you believe cryptocurrency is not just about wealth accumulation, but part of a broader vision?

That's right. There have been many discussions about the mission of cryptocurrency, so there's no need to elaborate here. Beyond that, for me, as a platform for achieving extraordinary wealth, cryptocurrency also gives us the opportunity to compete on a global scale. I want to leverage this success to support larger causes, such as biomedical research, space exploration, and environmental protection. In my company, through personal investments from my co-founders and me, we have actually invested in robotics, biocomputing, home cancer detection, and other cutting-edge technologies that are not related to crypto. Sometimes these founders are even pioneers in crypto or have an interest in it. All of this is interconnected.

What advice do you have for those looking to achieve success in the crypto space today?

My motto is simple: "Stay alive, smile, and think long-term." "Stay alive" means taking care of yourself and enjoying life while you’re young. "Smile" means appreciating where you are and making the most of every moment. "Think long-term" means having patience, understanding when to allocate resources, and knowing where you want to make a contribution. If you have this mindset, you are not only contributing to society but doing so in a way that has a long-term impact. This is how you achieve success, not just in the crypto space, but in life as well.

Related reading: Dialogue with the founder of Selini Capital: From poker player to trader, the secret to doubling every year for 13 consecutive years

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