Google Sheets – Conditional Formatting Based on External Resource

This is similar in spirit to Convert all text to UPPERCASE in a Google Spreadsheet, so a similar script solution can be used. This script automatically replaces 0-4 by corresponding Harvey Balls in the spreadsheet to which it's bound. (It does not affect pre-existing cells, since it's triggered by edits.)

function onEdit(e) {
  var n = parseInt(e.value, 10);
  if (n == e.value && n >= 0 && n <= 4) {
    e.range.setValue(['○', '◔', '◑', '◕', '●'][n]);
  }
}

The check n == e.value is to avoid converting fractional values like 2.3.

One can also extend the condition with something like

&& SpreadsheetApp.getActiveSheet().getName() == 'MySheet' 

to restrict the automatic replacement to a particular sheet.

UPDATE FROM COMMENTS:

You need 3 custom format settings, all applide to the range B3:B. The First is set to

Format cells if...     Cell is empty
and the fill is set to None

The second and third are Custom Formula where the Formula are:

For red:

=B4<B3

and for green:

=B4>B3

OLD INFO FOR Comments

You need 2 conditional format rules. Both applied to cells B2:B, with Custom formula is selected. In the first, set the formula to:

=B1<B2

and set the color to the Red you want to see. In the second, change the formula to

=B1>B2

and select the green color you wish.