I can understand your confusion too coz it took me a few times of re-reading to understand the cause of it. The signal is actually just an indication that the first bar is either the top or bottom of a move. So when the signal is generated on the first bar, you take th trade on the close of the third bar or the open of the fourth bar provided that there is no gaps.
So in essence this thing generates alot of repetetive signals. In order to negate this (multiple buy/sell signals), when a buy signal occurs, the next signal that shall come should be a sell to indicate the end of a move.
This is basically a Chaos Fractal and works well in trending markets but in ranging markets, like most other indicators, fails dismally. Used in conjunction with a trend strength indicator can be powerful pip-puller - see "gator" and "alligator" indicators. Not a criticism, merely an obervation.