This game is awesome! It feels so tense fighting him, I love it. Also, eyes didn't expect that trick. Hahaha.
To beat the red guy, dodge in the correct direction to avoid his hooks, then when he reaches into his jacket: punch him if he pulls out a knife or dodge if he pulls out nothing.
Edit: The best way to get damage is to attack multiple times immediately after successfully avoiding an attack. You get in more hits that way! This game was inspired by Punch-Out!! for the NES where that's the main way of attacking opponents.