C.Ronaldo, I had the same suspiscion, that the player's form depended on his consistency stat.
So I did some testing with players with 1 and 8 in consistency and also with players with 1 and 8 in condition. I played with these players in a league of 16 games.
The conclusion was, I did not see any influence of consistency nor condition on the form arrows.
The fatigue bar isn't affected by consistency/condition stats either (at least I didn't notice it after 16 games). But it accumulates when you play with the same players again and again and again...
So I still don't know what the consistency and condition stats do.
However, I found out that the form arrows are not completely random. The player's form change slowly from week to week, like real life.
So you are more likely to see a player going from green to yellow to red back to yellow and back to green than someone jumping directly from green to red to green, and the same goes for blue and grey arrows.
Here are some numbers for your enjoyment
RED = 15
YELLOW = 60
GREEN = 194
BLUE = 65
GREY = 13
Meaning that there's about 50% chance of a green arrow, 20% chance of yellow and blue arrows, and 5% chance of getting red and grey arrows.