Sorry about the bash link, it seemed like you asked for changing colours in the shell, not in your xterm.
Yes, that's the right command. You can also use -bg for the background colour, and the colour can also be specified like this for customized colours:
xterm -fg rgb:00/00/00
where 00 is two hex digits for red, green and blue components.
Also, you can use resources for this so you don't need to specify options on all your shortcuts.
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