There are a couple methods to melt chocolate (or your candy melts):
Microwave - In a microwave safe container, microwave using your defrost setting. Melt for 30, then stop and stir. Then continue to microwave for 30 second intervals until smooth and completely melted.
Double Boiler - Fill lower pan with water to below level of top pan. Bring water to a gentle simmer. Place your chocolate in the top pan and stir occasionally until smooth and melted. (If you don't have a double-boiler, you can makeshift one by placing a heat-safe bowl on top of a pot)
I find candy melts easy to manage using the microwave method. But for the chocolate chips, I enjoy using the double-boiler method.
For this recipe you can use any color of candy melts you want (green, orange, white, red...). You just want a color that pops against the chocolate.