First off, this game sucks. Not because it's hard, but because it puts you in situations you literally cannot avoid. All you high scorers -- what do you do when the red ship literally spawns right on top of you and you have no time to fight back? Do you just take your thumb off the fire button and disappear as fast as you can? I had a similar problem with Jawbreaker but at least in that game there were some strategies to beat it.
What I learned to do is shoot straight up as soon as I hear the warning signal for the red Death Ship. If it "spawns" right above me I get it. This doesn't always work though; sometimes it gets me as well.
As soon as I see where the red Ship is , if not above me, I relocate to a position to be able to shoot it. All this happens really fast. You have to be very vigilant the whole game.