According to this interview with the director Rodrigo Cortés, it's an illusion Murphy actually performs:
After Murphy was cast, the actor hung out with a magician in Cortés’s native Spain and watched David Copperfield and Criss Angel’s shows in Las Vegas. Murphy learned a few tricks along the way, all of which he performs in the film, including a “...
According to this review on The Huffington Post:
the title refers to warning signs of fraud that trained debunkers
should be able to spot
This review on AXS explains this a bit more:
Red Lights follows two paranormal investigators who set out to debunk
fraudulent mind readers, ghost hunters, faith healers and the like by
detecting what they call ...
I just watched Red Lights, like two-three days ago. If I understood what I was seeing, there IS a correlation between the two events. Tom Buckley. He didn't have conscious knowledge of, or control over his abilities. He hadn't ever acknowledged that he had abilities, not even to himself, except by jokingly saying he was psychic at one point. The fact that it ...