There are a few answers to this question but basically it comes down to this one by Glenn Baylock: Red symbolizes the blood that Jesus spilt to redeem us from our sins.
Green is the color of life. Therefore, green symbolizes the potential for eternal life that Jesus' sacrifice made possible for all of us. The evergreen tree is green all year round. So, it also symbolizes eternal life.
The flame of a candle, the lights on the tree and the star on top are all meant to remind us of the new star that appeared to proclaim the birth of the promised Messiah.
The bell is a reminder of the bells worn by sheep. They provide a means for the shepherd to find the sheep that has wandered from the flock and become lost. They symbolize our pleas to the Good Shepherd for guidance back to His flock.
The candy cane is shaped like a shepherd's staff. It symbolizes the responsibility that we all have to be shepherds, to help each other and guide each other back to God.
Finally, the bows on the top of the presents are symbolic of brotherhood. It should be a reminder that, just as the ribbons are tied together, we should all be tied together by the knowledge that we are all God's children and, therefore, brothers and sisters.
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