The indicator needs a minimum of THREE bars to paint a bar. However, it can (and usually does) take more bars than that during sideways consolidation.
Please see the attached screenshot. The cyan/yellow arrows indicate when the signal actually fired off. So, yes this indicator is very dangerous in chop situations, assuming one is taking all buy/sell signals. Please listen to cooter and be very careful in your usage of this tool.
As far as I know
John Carter uses it as follows:
a) Signal confirms a move against a support/resistance level
b) Uses it to time entries/exits. For instance, I've heard him say that if long, and a Scalper Sell + 2 red TTM's fire off, he will exit his remaining position. I have also seen him initiate trades based on Scalper Buy + 2 Blue TTM's
The point is, one needs to filter this to be used appropriately (just like every other indicator).