The idea of the crimp is to squash the metal of the connector onto the exposed wire. Strip off about 1/4" of insulation, stick the wire in and crimp the area of the connector that's in the middle of the stripped wire. With practice you'll be able to do it without cutting through the insulation.

The colored slots on the end show what connectors that slot handles. Red is 22-18 gage, blue is 16-14 gage and yellow is 12-10 gage.

That crimper won't do 8 gage and bigger wire. For 8 gage I use a pair of vice grips. For anything bigger, use a vice.