Mid or standard timing is fine.

Thats not an alarm light, it should blink then come on steady, that means its good, if its flashing slowly (1 flash / sec) then the single wire isn't plugged in right or the radio isn't setup correctly. If its flashing 2 flashes that means its getting a rudder or trim input, if its off it means its in rate mode and if its on steady that means it booted correctly and is in heading hold.