Red Badge of Courage, the title of Stephen Crane's book, refers to a soldier being wounded in battle. The bloody wound is that soldier's red badge of courage.
The following has been taken from the BookRags study guide: In the book Henry, the protagonist of the novel, is a naive, young farm boy dreams of glorious battle. He signs up in the Union Army against his mother's wishes. Though he gets his notion of war from books about Greek warriors, his initial confrontation with true war perplexes him. Upon entering battle and witnessing the confusion and panic of his regiment, he flees into the woods and feels like a coward. After he receives his "red badge of courage," a head wound, this shame begins to disappear, however. He realizes that there is no dishonor fleeing certain death. He becomes confident and is happy to be called a "wild cat" by his superior officer.