yes you are nearly correct, it records home point as soon as you start motors (diagnal stick input).The led's are telling you how many satelites have been locked onto with the gps.
1x red= 6 sats
no red= more than 6 (7 or more)
if you had it in gps mode the led would be green instead of orange.
i Have still flown with one red led, once up in the air it will go full green, it still records home point but not quite as accurate as no reds!
