I might have written one of the previous confusing explanations. I hope this is more stripped-back. Maybe best to ask further questions if you need expanded explanations of the terminology:
1. Turn the engine by hand until the arrow cast into the timing-chain cover aligns with the embossed line on the pulley-cover.
2. Assuming that the valve-clearances are set or reasonably accurately set, check which of the pairs of rockers at this point is able to be wobbled up and down. For instance, if it's the pair closest to the rear of the car we can call this cylinder 1 and vice-versa. We know this cylinder is on the compression stroke and would be the one that needs a spark.
3. Put the 123 in the engine with the rotor-arm pointing towards the engine block. Remove and adjust to compensate for the turn of the helical gears, but aim to get it at 90 degrees to the block.
4. Secure the distributor but just enough to still allow you to turn it.
5. Connect the red wire of the123 to the positive terminal of the coil; the one with a wire from the ignition, which should also then be left on. Don't connect the black wire. Turn on the ignition.
6. Rotate the 123 anti-clockwise until the green LED lights up and can be seen in the gap in the rotating disc.
7. Secure the distributor, turn off the ignition, and connect the black wire to the other terminal of the coil.
8. Connect the HT lead from the coil to the distributor cap.
9. Connect an HT lead from the spark plug on the cylinder previously identified as the one on full compression to the socket on the distributor cap to which the rotor arm is pointing. Connect the second lead to the spark plug on the other cylinder.
There is no need to do any timing adjustments as the chip in the distributor does it for you. But for greater accuracy you should check the advance using a strobe and make minor adjustment tohedistributor rotation if needed.
