The history of the Red Parrot can be traced back to the period of 1989 through 1990 (Chinese Republic Year Min Guo between 78 and 79). With the publication of an article called A New Hybrid Fish by Mr. Chen Yan Qing and Mr Cai Jian, the fish pet industry set their sights on a man-made hybrid fish (Bian Zhong Yu) or a modified hybrid fish (Gai Liang Yu Zhong), or a cross-bred hybrid fish (Za Jiao Yu Zhong). The idea may sound odd, but it truly describes the entire breeding process of this hybrid fish. Most of the fish breeding researchers in Taiwan prefer to call this species Bian Zhong Yu meaning a hybrid fish.
Through years of experimenting, fish breeding researchers have discovered a breeding technique to cross breed between Red Devil (Cichlasoma citrinellum) and Redheaded Cichlid (C. synspillum) to create offspring known as Red Diamond (Xue Zhuan Shi) and Red Precious Stone (Xue Bao Shi).
The only difference in these techniques rests on the sequence of sex selection in pairing the parentage. Some breeding researchers chose male Red Devil to pair with female Redheaded Cichlid, some did the opposite.