The red bit is the torque setting, you should tighten them no tighter than 3. As for where to place them, you simply put them where the natural grooves are in the frame. When tightening just make sure the allen key is in straight else you will round it off, its pretty straight forward fitting them but any further questions you have i can answer.
Many thanks for a really quick and helpful reply. On looking at the tool more closely I see the red plastic is marked as a Nm gauge, with the 3 being slightly highlighted from the other numbers, so all makes sense as presumably the point is the marker (for the gauge) and will move as the allen key twists slightly at the point of the nut becoming tight. As for the positioning, your comments are also noted.