Hello ThienGia.

The indicator is used to identify the current market trend.

It only has two parameters. The period and the noise threshold. 

The period works like any other period you've worked with on moving averages.

The threshold is multiplied by the ATR to determine which moves are considered important and which ones are considered noise.

Once you have applied the compass on a market you will something resembling this. The red zones indicate the market was making down moves, the green zones indicate zones when the market was making up moves and finally the white zones indicate weak market moves that didn't break the noise threshold we defined after setting the period.

Let me know if you have any more questions.