if you read the readme, it says try to keep the green and red speck on the target, making minor adjustments as it the target or missile moves, controlling the missile is also as crappy as controlling a Microsoft simulator, if you press up, to stop it from turning upwards more you have to press down (I'm not really that sure)
this one really helps (taken from readme) :
X-4 Rocket
The X-4 air-to-air rocket is wire guided. All rocket-carrying aircraft (Ta-152C, Ta-183 and Heinkel Lerche III) have a single rocket control module, and as such can guide only one rocket at a time. When launching multiple rockets simultaneously, only the last rocket fired can be guided.
To guide the rocket, use the "Increase Sight Attitude", "Decrease Sight Attitude", "Adjust Sight Control to Right" and "Adjust Sight Control to Left" keys. We recommend assigning them to the Up, Down, Right, and Left arrow keys correspondingly.
The easiest way to guide the rocket to target is to fire from the target's six-o-clock level while flying on the same course. Guide the rocket to keep the lights on top of the target with no visible lateral movement until the moment of impact. Use gentle taps to provide last-minute guidance. The rockets detonate remotely, so no direct impact is required.
This method should be used to attack non-maneuvering heavy bombers from 3,000 to 3,500 meters away.
NOTE: The guiding wire is not visually modeled.