If he was never taught how to lunge, then of course he is confused. xD
I would suggest getting a trainer to work with your horse, just to work out the confusion, then they can hand the 'reins' over to you.
Aside from that, I would suggest using a lunge line (with either a halter or a bridle, though a bridle may be more forgiving in the beginning) and a lunge whip. Stand in the center with your horse, and drive it away with the lunge whip. There is not need for wild movements, light flicks of the whip usually suffice.
Try to stay mostly in the center (I assume you're using a round pen?). When you move forward and close in on your horse's space it is asking the horse to slow, and backing up implies a faster pace or gait.
Also, how does your horse respond to verbal cues? If he knows them, use ones he is familiar with. That may help to clear up some of the confusion.
The sensitivity of the internet baffles me.