I'm making a pair of socks right now that use some stranded work in the cuff and there is another pair in the booklet that uses something almost like regular stripes on the foot. I think you should be able to get enough stretch to work with only carrying the floats 2 stitches. Just be careful to keep the floats (the yarns carried in behind of the color used) loose. It is pretty hard to get them too loose. After the first stitch of each color change stretch the fabric a little from side to side. What you want to do with the stretch is to elongate the new color you just made the stitch out of, across in the back from the place it was used last. It will have a tendency to want to be too short to fit (very) comfortably across the back of the last two stitches. If it seems a little sloppy when you do it, it is probably right, no long, dangling loops but plenty of slack.
I wondered about this in your comment,
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I'm bringing each strand forward when its time to use it and then back when I'm not but its looking completely wrong
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. If you are knitting in the round you shouldn't really be bringing anything to the front. Both colors stay in the back all the time and you just knit with them alternately.
There are several ways of handling the two colors. Some people carry one color English style, in the right hand and the other color Continental style in the left hand. I do this and it works very well, you just knit with one color and then the other, you don't have to worry about how you pick up or anything.
Some people carry both colors in the left hand and knit up one color and then the other. I've experimented with this and can do it after a fashion, but I need a yarn guide (a little devise that goes on your left index finger to separate the colors). This works real slick too, and you just knit along switching back and forth.
When I first learned stranded knitting I knit English style and held (or didn't necessarily hold) both yarns in the right hand. The way I did it involved dropping one color to pick up the other color, this may be what you are doing. I don't think it matters too much which color you pick up on top, but be consistent. If you decide to pick up color A over, and B under, do them that way consistently and it should look okay.