How to find the direction of current of the circuit?
The diagram you posted is a schematic diagram. It is not meant to represent the physical arrangement of the parts, or the direction that the coils turn. 
Since the magnet is oscillating in and out of the coil, sometimes the current will flow one way and sometimes it will flow the other way. It doesn't really matter which current direction is associated with which direction of movement of the magnet.
The connection of LED B is problematic. Your statement that the magnet moving through the coil "generates a peak voltage of 4V" is nonsense given the placement of LED B. I'll leave it as an excercise to understand why.
The connection of the resistor is problematic. One end seems to be only connected to itself. This means the resistor has no effect on the operation of the circuit and only makes the drawing more confusing.
The connection of LED C is problematic (or maybe part of what you're being asked about). Do you see why LED C will never be forward biased?
The schematic drawing conventions are inconsistent. At one place, a connection between two wires is shown with a blob connection. At another, a crossing without a connection is shown with a "jump" to emphasize the lack of connection. At other places, wires cross without either a blob or a jump, so it's not clear whether a connection is intended or not.