The Memo Function is the easiest way to solve this puzzle.
Start with the two red squares that have already been stitched, and mark off the squares in the same rows, columns, and diagonals so that you know not to place any more red squares there.
If you mark the unusable spaces as shown in the previous hint, you should find that there's only one place for you to put the second red square in the right-hand yellow area.
Now place that square, and mark off the spaces that it makes unusable.
Continuing from Hint 2, there are now only three usable spaces in the top yellow area.
Since two of them are in the same column, it's impossible to use them both. So you know for sure that you need to use the remaining third space.
If you mark off the spaces in the same row, column, and diagonal as the red square you placed in Hint 3, you'll see where to place the second red square in the top yellow area.
In turn, this will tell you where to place the other red square in the left-hand yellow area. The rest should be easy.
Solution
Incorrect
Too bad.
You must have placed two red squares in the same row, column, or diagonal.
Correct
Now you've got a balanced embroidery pattern. From a certain point of view...