You can fight Red Loong early but youll need the Loong Scales item first which comes later in the game. Head to Forest of Wolves and teleport to Outside Forest Shrine then go northwest until you spot a waterfall next to some trees and a Buddha statue. Use the Loong Scales on the waterfall, and itll disappear showing a hidden path. Going through leads to a valley where Red Loong attacks right after a cutscene. For the fight focus on heavy attacks to stagger him which gives you about ten seconds to hit the censers on his back for extra damage. Watch out for his claw swipes and tail attacks, but the real danger is his lightning AoE moves so run away when you see those coming. Using transformations and Immobilize spell helps create openings for damage, and staying aggressive is key to winning. The fights pretty tough for early game, but getting those rewards early gives you a big advantage later on. Most players get caught by the massive lightning attacks so keep an eye out for those. If its too hard you can always come back later when youre stronger since the boss stays available once you have the Scales, just remember to dodge those AoE attacks they hit really hard at any level.