If a stock ends below its opening price, it has had a red day. Consider a stock that starts at $1 and ends at 80 cents. That would be a bad day. The day's trading activity is usually displayed in red on stock charting software. When you trade the initial red day pattern, you are not looking for any red days.
Start by looking for a stock that has multiple green days in a row. This is a sign that it has become overextended. This trading strategy relies on overextension. Do you know what a first red day pattern is? A red day occurs when the opening is higher than the closing price. On May 10th, for example, the opening price was 422 and the closing price was 417. After that, every day is a red day. When you use black and white charting, every day is a black day. You want to see several green days before an FRD, then your first red day is a red candle. This indicates that the asset is overextended.
Even an index can become overstressed. However, we are often looking for penny stocks that will respond more slowly to long-term overextension.

In the context of stocks, the term “first red day” refers to the first trading day when a stock closes lower after a series of consecutive gains. It often follows a strong upward move where a stock has been rising quickly for several days, fueled by momentum, speculation, or news. The first red day is seen by many traders as a potential turning point, signalling that buying pressure is weakening and selling pressure may be increasing. While some view it as an opportunity to short a stock anticipating a pullback, others use it as a cautionary sign to lock in profits. However, it should not be relied on alone and must be confirmed with other indicators.