A suggestion:
Start without using an indicator.
Learn to rough center just by eye. This is how:
Put a pointer of sorts in the toolpost. I often
use a cutoff blade but that can dig in, so I
would suggest you start with the back end of a
toolbit.
Put a white card or piece of paper under the
workpiece, so you can easily see the gap between
your pointer and the workpiece. Illuminate the
card with a lamp and de-emphasise any lighting
that tends to illuminate the workpiece surface
itself.
The first thing you must set in your mind is
the notion that you are going to center the
work up in stages. At each stage, the tension
between the opposing jaws will be tighter and
tighter as you go along.
So to start you want to keep the tension on
the jaws pretty light.
Put your workpiece in and center it as well as
you can. Typically this means: have the jaws
positioned into the chuck body about the
same distance. If the chuck is small and the
part large, have the jaws protruding from the
body about the same distance.
Now turn the spindle and find the spot where
the distance becomes the closest to your
pointer. Bring the pointer in, using teh cross
slide, so it almost touches the workpiece. But
not quite, leave a bit of a gap visible as you
sight through to the card underneath. The
card is there to help make that gap visible,
remember.
Now turn the spindle 180 degrees, and you will
see the gap grow to just about its largest size.
Turn the spindle so adjusting screw closest to the
rear of the machine, is right at the rear. If
two screws are equidistant (ie, they were at
45 degree angles) then simply pick one at random
and put it towards the rear.
The gap got smaller just then.
Now gently slack the screw pointing towards
the front, and tighten the screw at the rear,
there by reducing the gap somewhat. The goal
here is to make it such that when you flip the
spindle 180 degrees, the gap stays the same.
So you need to guess about how much to move the
part by adjusting the pair of screws.
Important things to remember now:
1) the two axis of the part in the chuck adjust
independently, so for now only touch one pair
of screws.
2) for now keep the overall tension between
the opposed adjusting screws pretty light.
So after making your adjustment, flip the
part 180 and see if that gap is the same. If
not that make a trim adjustment so it is closer.
The gap will still be large, and you may be
tempted to move the pointer closer, but not yet.
Now turn the chuck 90 degrees and go to work
on the other axis. There will be one screw
where the gap is large, and one where it is small.
Do the same drill, if the gap is large then
you want to slack the front screw and snug the
rear one. Do this repetitively till you have
made the gap showing be nearly the same if the
spindle is turned 180 degrees.
Now is the time to bring the pointer in because
you can do so without digging it in to the
workpiece.
Repeat the adjustment process again, this time
you are working with a smaller gap and the
adjustments will be a good deal finer. At the
same time you can begin to increase the pressure
that the opposing screws extert on each other
through the workpiece.
Typically within three iterations you can
have the jaws tight and the part centered within
your error band. The last adjustments are
often done to make the part more snug, so you
don't slack one screw and tighten the other,
you simply tighten one.
Other important bits:
You want to have the centering process proceed
in a gradual fashion where the overall tension
in the screws increases as you go along.
The two axis of the chuck are to first order
independent. You do first one axis and then
the other. Then step up to a higher overall
tension level and a higher accuracy.
Dial gages tend to confuse the novice at first.
It is altogether too easy to watch the clock and
forget what is really happening to the part.
Visualizing the position of the workpiece with
respect to a fixed pointer is a way of gaining
skills at a basic level. Sort of like saying
'if you get the spares the strikes come by
themselves' in bowling.
The human eye is incredibly sensitive, using
only a white card and a pointer, it is easy to
center a part up to within five thousanths TIR
with a bit of practice.
Once the part is this close the dial gage can
be employed and brought in the rest of the way,
as close as one wishes.
Jim