Para uso do TextWatcher...

et1.addTextChangedListener(new TextWatcher() {
    @Override
    public void onTextChanged(CharSequence s, int start, int before, int count) {

        // TODO Auto-generated method stub
    }

    @Override
    public void beforeTextChanged(CharSequence s, int start, int count, int after) {

        // TODO Auto-generated method stub
    }

    @Override
    public void afterTextChanged(Editable s) {

        // TODO Auto-generated method stub
    }
});

A interface TextWatcher tem 3 métodos de callbacks que são todos chamados na seguinte ordem quando ocorreu uma alteração ao texto:

1 beforeTextChanged(CharSequence s, int start, int count, int after)

: Chamadas antes de {[39] } as alterações foram aplicadas ao texto.
O parâmetro s é o texto antes de {[39] } qualquer alteração é aplicada.
O parâmetro start é a posição do início da parte alterada do texto.
O parâmetro count é ocomprimento da alteração parte na sequência s desde a posição start.
E o parâmetro after é o comprimento da nova sequência que irá substituir a parte da sequência s de start a start+count.
Você não deve alterar {[39] } o texto no TextView deste método (usando myTextView.setText(String newText)).

2 onTextChanged(CharSequence s, int start, int before, int count)

Similar ao método beforeTextChanged mas chamado após {[39] } o texto muda.
O parametter s é o texto após as alterações foram aplicado.
O parametter start é o mesmo que no método beforeTextChanged.
O parâmetro count é o parâmetro after no método beforeTextChanged.
E o parâmetro before é o parâmetro count no método beforeTextChanged.
Você não deve alterar {[39] } o texto no TextView deste método (usando myTextView.setText(String newText)).

3 afterTextChanged(Editable s)

Você pode alterar o texto no TextView deste método.
/!\ Aviso: quando alterar o texto no TextView, o TextWatcher será despoletado novamente, iniciando um loop infinito. Você deve então adicionar como uma propriedade boolean _ignore que impede o loop infinito.
Exemplo:

new TextWatcher() {
        boolean _ignore = false; // indicates if the change was made by the TextWatcher itself.

        @Override
        public void afterTextChanged(Editable s) {
            if (_ignore)
                return;

            _ignore = true; // prevent infinite loop
            // Change your text here.
            // myTextView.setText(myNewText);
            _ignore = false; // release, so the TextWatcher start to listen again.
        }

        // Other methods...
    }

Resumo:

O meu ouvinte personalizado:

Pessoalmente, fiz o meu ouvinte de texto personalizado, o que me dá as 4 partes em cordas separadas, o que é, para mim, muito mais intuitivo de usar.

 /**
   * Text view listener which splits the update text event in four parts:
   * <ul>
   *     <li>The text placed <b>before</b> the updated part.</li>
   *     <li>The <b>old</b> text in the updated part.</li>
   *     <li>The <b>new</b> text in the updated part.</li>
   *     <li>The text placed <b>after</b> the updated part.</li>
   * </ul>
   * Created by Jeremy B.
   */

  public abstract class TextViewListener implements TextWatcher {
    /**
     * Unchanged sequence which is placed before the updated sequence.
     */
    private String _before;

    /**
     * Updated sequence before the update.
     */
    private String _old;

    /**
     * Updated sequence after the update.
     */
    private String _new;

    /**
     * Unchanged sequence which is placed after the updated sequence.
     */
    private String _after;

    /**
     * Indicates when changes are made from within the listener, should be omitted.
     */
    private boolean _ignore = false;

    @Override
    public void beforeTextChanged(CharSequence sequence, int start, int count, int after) {
        _before = sequence.subSequence(0,start).toString();
        _old = sequence.subSequence(start, start+count).toString();
        _after = sequence.subSequence(start+count, sequence.length()).toString();
    }

    @Override
    public void onTextChanged(CharSequence sequence, int start, int before, int count) {
        _new = sequence.subSequence(start, start+count).toString();
    }

    @Override
    public void afterTextChanged(Editable sequence) {
        if (_ignore)
            return;

        onTextChanged(_before, _old, _new, _after);
    }

    /**
     * Triggered method when the text in the text view has changed.
     * <br/>
     * You can apply changes to the text view from this method
     * with the condition to call {@link #startUpdates()} before any update,
     * and to call {@link #endUpdates()} after them.
     *
     * @param before Unchanged part of the text placed before the updated part.
     * @param old Old updated part of the text.
     * @param aNew New updated part of the text?
     * @param after Unchanged part of the text placed after the updated part.
     */
    protected abstract void onTextChanged(String before, String old, String aNew, String after);

    /**
     * Call this method when you start to update the text view, so it stops listening to it and then prevent an infinite loop.
     * @see #endUpdates()
     */
    protected void startUpdates(){
        _ignore = true;
    }

    /**
     * Call this method when you finished to update the text view in order to restart to listen to it.
     * @see #startUpdates()
     */
    protected void endUpdates(){
        _ignore = false;
    }
  }

Exemplo:

myEditText.addTextChangedListener(new TextViewListener() {
        @Override
        protected void onTextChanged(String before, String old, String aNew, String after) {
           // intuitive usation of parametters
           String completeOldText = before + old + after;
           String completeNewText = before + aNew + after;

           // update TextView
            startUpdates(); // to prevent infinite loop.
            myEditText.setText(myNewText);
            endUpdates();
        }

Resposta suplementar

• vermelho: texto prestes a ser suprimido (substituído)
• Verde: texto que acabou de ser adicionado (substituindo o antigo texto vermelho)

Usar o TextWatcher no Android

addTextChangedListener(new TextWatcher() {

        BigDecimal previousValue;
        BigDecimal currentValue;

        @Override
        public void onTextChanged(CharSequence s, int start, int before, int
                count) {
            if (isFirstTimeChange) {
                return;
            }
            if (s.toString().length() > 0) {
                try {
                    currentValue = new BigDecimal(s.toString().replace(".", "").replace(',', '.'));
                } catch (Exception e) {
                    currentValue = new BigDecimal(0);
                }
            }
        }

        @Override
        public void beforeTextChanged(CharSequence s, int start, int count,
                int after) {
            if (isFirstTimeChange) {
                return;
            }
            if (s.toString().length() > 0) {
                try {
                    previousValue = new BigDecimal(s.toString().replace(".", "").replace(',', '.'));
                } catch (Exception e) {
                    previousValue = new BigDecimal(0);
                }
            }
        }

        @Override
        public void afterTextChanged(Editable editable) {
            if (isFirstTimeChange) {
                isFirstTimeChange = false;
                return;
            }
            if (currentValue != null && previousValue != null) {
                if ((currentValue.compareTo(previousValue) > 0)) {
                    //setBackgroundResource(R.color.devises_overview_color_green);
                    setBackgroundColor(flashOnColor);
                } else if ((currentValue.compareTo(previousValue) < 0)) {
                    //setBackgroundResource(R.color.devises_overview_color_red);

                    setBackgroundColor(flashOffColor);
                } else {
                    //setBackgroundColor(textColor);
                }
                handler.removeCallbacks(runnable);
                handler.postDelayed(runnable, 1000);
            }
        }
    });

Criar uma subclasse TextWatcher personalizada:

public class CustomWatcher implements TextWatcher {

    private boolean mWasEdited = false;

    @Override
    public void beforeTextChanged(CharSequence s, int start, int count, int after) {

    }

    @Override
    public void onTextChanged(CharSequence s, int start, int before, int count) {

    }

    @Override
    public void afterTextChanged(Editable s) {

        if (mWasEdited){

            mWasEdited = false;
            return;
        }

        // get entered value (if required)
        String enteredValue  = s.toString();

        String newValue = "new value";

        // don't get trap into infinite loop
        mWasEdited = true;
        // just replace entered value with whatever you want
        s.replace(0, s.length(), newValue);

    }
}

Defina o ouvinte para o seu texto:

mTargetEditText.addTextChangedListener(new CustomWatcher());

Uma perspectiva um pouco maior da solução:

@Override
    public View onCreateView(LayoutInflater inflater, ViewGroup container, Bundle savedInstanceState) {
        View v = inflater.inflate(R.layout.yourlayout, container, false);
        View tv = v.findViewById(R.id.et1);
        ((TextView) tv).addTextChangedListener(new TextWatcher() {
            @Override
            public void onTextChanged(CharSequence s, int start, int before, int count) {
                 SpannableString contentText = new SpannableString(((TextView) tv).getText());
                 String contents = Html.toHtml(contentText).toString();
            }

            @Override
            public void beforeTextChanged(CharSequence s, int start, int count, int after) {

                // TODO Auto-generated method stub
            }

            @Override
            public void afterTextChanged(Editable s) {

                // TODO Auto-generated method stub
            }
        });
        return v;
    }

    public class Test extends AppCompatActivity {

    EditText firstEditText;
    EditText secondEditText;

    @Override
    protected void onCreate(@Nullable Bundle savedInstanceState) {
        super.onCreate(savedInstanceState);
        setContentView(R.layout.test);
        firstEditText = (EditText)findViewById(R.id.firstEditText);
        secondEditText = (EditText)findViewById(R.id.secondEditText);

        firstEditText.addTextChangedListener(new EditTextListener());

    }

    private class EditTextListener implements TextWatcher {

        @Override
        public void beforeTextChanged(CharSequence s, int start, int count, int after) {

        }

        @Override
        public void onTextChanged(CharSequence s, int start, int before, int count) {
            secondEditText.setText(firstEditText.getText());
        }

        @Override
        public void afterTextChanged(Editable s) {
        }
    }
}

editext1.addTextChangedListener(new TextWatcher() {

   @Override
    public void onTextChanged(CharSequence s, int start, int before,
    int count) {
     editext2.setText(new String(s.toString()));

          }

   @Override
     public void beforeTextChanged(CharSequence s, int start, int count,
      int after) {

         editext2.setText(new String(s.toString()));
        }

      @Override
          public void afterTextChanged(Editable s) {

          editext2.setText(new String(s.toString()));
      }

         });

Para mais referências Clique aqui http://androiddhina.blogspot.in/2015/05/android-textwatcher.html