Trading Eugene's interview transcript: Newcomers first focus on on-chain assets, most markets do not care about fundamentals

Host: 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 experience and market insights every month. He is one of the best crypto traders, but his journey is bumpy. After nearly bankruptcy in May 2021, he was able to become an investor and build one of the most prestigious funds in the field. Recently, Taiki Maeda, founder of HFA Research, conducted an exclusive interview with trader Eugene Ng Ah Sio. The following is a transcript.

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

I co-founded Tangent, a multi-strategy investment company, where I focus on the liquidity market, while my partner Jason is responsible for venture capital. I was the head of Defiance Capital and entered the crypto space as a retail investor in 2020 and I have grown a lot since then.

You are a very successful trader now, but you seem to have had some minor problems in 2021. Can you share your mistakes and what you gained from them?

At the beginning of 2021, I did not avoid risks and actively used leverage. I took profits in February but reinvested by March, failing to avoid the May market crash. I suffered an 80% retracement at the worst and was forced to deliver core leverage positions at lows due to excessive exposure and buying on dips in my leverage. It's cruel, but it taught me the most important lesson: Survival comes first.

I chose the stop loss and started over. A major mistake was that positions were over-concentrated on a single DeFi protocol that did not recover after the market was down. No matter how firm my beliefs were, that loss made me realize the necessity of diversified investment.

The key is to stay at the "gambling table". No transaction should leave you bankrupt. Adaptation, risk management and learning from mistakes are key to long-term success. Even today, minimizing the risk of bankruptcy is still the most critical factor we need to solve when determining the position size.

How did your trading style evolve?

The first is to understand how to position it - looking for asymmetric opportunities with huge upward potential. The harder part is real-time identification. It comes from experience, repeated attempts and instincts.

To me, crypto trading is still an instinct. When I see a new opportunity, it usually creates intuition within a few minutes, and over time, I know that my initial intuition is usually correct. Looking back, I tried to analyze what triggered this instinct—what specific factors made me feel confident about an investment. This pattern tends to be repeated. Although the market is growing, the biggest winners often have similar characteristics.

How do you deal with the psychological aspects of trading?

This is a huge challenge. In a 24/7 market like cryptocurrency, continually struggle with greed, fear and the feeling that someone will abandon you. It’s crucial to keep my mind clear, and I even sometimes stop trading completely within two to three days to adjust my status.

One important lesson I learned is: You can't grasp everything. You have to accept the reality of missing certain opportunities. I stick to my field of expertise. Recognizing one's strengths and ignoring distractions is essential for long-term success. As GCR once said, “The person chasing two rabbits can catch nothing.”

How do you view the betting scale?

I believe in concentrated positions. Sometimes 80% of our portfolio is investing in the top 3 ideas. The key is to align your portfolio with the bets you most confident in, making sure the size matches your beliefs. Of course, this also means you need strict risk management to avoid huge losses.

How do you deal with your inner struggles that want to avoid risks and get huge returns?

This is a difficult problem. During the first cycle, I took huge risks, such as investing 80% of my net worth in a single asset. While it may seem ridiculous in hindsight, this boldness brings huge rewards. Now, as an investor in the second cycle, I am more cautious, but I still ask myself: What made me make those big moves before, and how can I copy this now without being reckless? The challenge is to take risks without losing my previous beliefs while still maintaining a realistic attitude towards market volatility.

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

This is a difficult question to answer. In hindsight, this seems ridiculous, but this risk gives me a significant compound return. Today, I asked myself if I could do the same thing again. As I matured, my awareness of risks became higher and higher, and I had a completely different system and framework to prevent myself from making major mistakes. At that time, I was still naive and I thought this mentality played a huge role in the success of the previous cycle. It is important to be aware of risks, but it is also important to dare to dream when the market brings you opportunities.

So, you mean that you are more cautious in investing now, but in order to get excess returns, you will still take the same level of risk?

That's right. Although this is daunting, making large-scale, concentrated bets is crucial. It's hard, but that's where the best cycle returns are generated. You have to be willing to take these risks even if they make you uncomfortable.

It sounds like you have developed a lot of self-discipline habits over the years. Can you share a bad deal case you’ve done and what you’ve learned from it?

I'm just an ordinary person and always make mistakes. What impressed me the most recently was that I was going long SOLs at $210 but didn’t follow the $200 stop loss point. The most important lesson in trading is to set a stop loss, and it must be executed. Once you are careless, mistakes can be even more dangerous and the risks you take far more than you planned at the beginning of the deal.

What would you say to yourself then?

I would ask myself, “If you sold your entire portfolio today, would you buy back the same assets at the same ratio?” Most people realize they won’t, but they still continue to hold bad positions out of persistence. Furthermore, opportunity cost is important – every dollar in an asset is a dollar that has not been invested elsewhere.

Another thing is to avoid the mentality of “making all the money back in one transaction”. This is a common pitfall. Don't trade retaliation, but focus on accumulating small victories.

How do you know when to reduce your position?

This is the most difficult part. Many people hold losses because they have emotional attachments or just hope that things will get better. But the key is to be honest with yourself. If you reevaluate your point of view and the situation has not improved, it is time to move on (“cut the flesh”). This is a problem faced by many retail investors.

How to make sure your bias does not affect your judgment?

Having a team certainly helps. In my company, we make everything transparent, so when I do something wrong, people can point it out. Accountability keeps me restrained. We conduct a rigorous and often cruel post-fact analysis of every major decision we make, and we encourage everyone, including new employees, to actively point out more “senior” members of the company in a cruel and transparent way. The market does not allow self-existence, and it is crucial to build a team dedicated to being thoroughly honest and not emotional. If you are alone, find someone to share your position and get feedback. It helps relieve emotional decision making.

So, does accountability play an important role in maintaining focus?

Absolutely so. Having a team or someone who is trustworthy to discuss deals can ensure you don’t get stuck when things go wrong. If you make a mistake, it is important to accept it and keep moving forward, rather than letting yourself get deeper. Accountability can prevent you from making more mistakes.

What do you recommend for participants who want to find a group or friend they trust?

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

What are the common characteristics of successful traders?

Successful traders are good at dealing with stress and can calmly make decisions when things become unstable. This is not something that can be learned easily - it is a natural skill. If you have it, hone it. If not, then recognize this and don't force yourself into a high-pressure environment. It is crucial to recognize where your strengths and weaknesses lie and thus choose your position.

What are the most common mistakes traders make?

It is often seen that people start fantasizing before things happen. This happens when people get stuck in the idea of ​​“success” because their portfolio has grown and they are starting to make significant changes to their lifestyle. They think that money on paper is real money, and they go out and buy things they don’t need, like expensive cars or luxury watches. But the reality is that unless the money is deposited into a bank account and taxes are paid, it is just a score on the scorecard. I always look at cryptocurrencies like this - it's a game, not real money before it becomes cash. When players do not understand this, they often do not manage their wealth and lifestyle well.

What are the common misconceptions about cryptocurrencies?

One of the biggest misunderstandings is that you should allocate capital based on fundamentals. It is believed that if a project has strong fundamentals, then the price will rise accordingly. But in reality, the market does not care about fundamentals in 90% of the cases. Making money is actually predicting which narratives will become popular first. When there is a catalyst, fundamentals are important, but most of the time, it is important to seize the next trend and make a judgment when you see it. Anyway, this is my experience. It's kind of like when you know something is going to happen, it happens suddenly and you do your best to deal with it because the market may change faster and further than you expect.

For those who are entering the crypto space today, would you advise them on how to succeed?

To be honest, if I entered the crypto space today, I would question whether it was worth it. But if you still want to get into the crypto space, I would like to say focus on on-chain assets first. They have the best upward potential and can provide the fastest compound returns for smaller portfolios. But on-chain opportunities will not always exist - on-chain assets are seasonal. When the opportunities in the on-chain market dry up, you also need to be able to trade on a centralized exchange. Both trading levels are key, but you should focus on mastering one level and mastering the other, and don't try to take into account both.

What are your personal goals in the next 10 years? Do you think cryptocurrency is just a means?

First of all, I really like this "game". Competing with the best traders and investors in the world is a big reason why I am in this industry. My goal for the next 10 years is to build the best self-operated funds in the crypto space. In the long run, my goal has turned to the stars. I have always dreamed of contributing to humanity as an interstellar species. A big part of this is to support space exploration as much as I can. One of my bucket list goals is to go to space before I die.

So, do you think cryptocurrencies are not just accumulating wealth, but part of a broader vision?

That's right. There are many statements about the mission of encryption, and it is not necessary to go into details here. Apart from that, for me, as a platform for achieving extraordinary wealth, cryptocurrencies also give us the opportunity to compete globally. I want to use this success to support larger causes such as biomedical research, space exploration and environmental protection. At my company, through my personal investments with my co-founders and we actually invest in robotics, biocomputing, home cancer detection and other non-crypto-related cutting-edge technologies. Sometimes these founders are even crypto pioneers, or are interested in encryption. All of this is related to each other.

What advice do you have for those who want to succeed in the crypto space now?

My motto is simple: "Living, smiling, long-term." "Living" means taking good care of yourself and enjoying life while you are young. "Smiling" means appreciating where you are and making the most of every moment. “Long-term” means being patient, knowing when to allocate resources, and knowing where you want to contribute. If you have this mentality, you are not only contributing to society, but also contributing to society for a long time. This is how you succeed, not only in the crypto space, but in your life.

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