How to 4 point dial indicate on lathe question?

I like to get the part as centered as possible before tightening the jaws. I mark the center if there's not a center reference already, then for a lathe, pin the part to the chuck, jaws retracted, using the tailstock and a suitable center or such in it. For a rotary table or flat surface it's even easier. As Parlo suggested, this is a good time for a bump tool. I put a ball bearing on both ends of a rod and keep it in a QC holder...one end is for radial positioning, the other end to square up the face.
You can do this either under power or not, as the situation requires. So, get it close, then tighten and make final adjustments.
 
Indicate the face first.

That works if you have Set Tru style chuck. If you have an independent jaw chuck and tried tha method, every time you loosened the chuck jaw to make an adjustment, you would be starting all over again. I prefer Keith Fenner's method which is to adjust for zero runout as close to the chuck jaws as possible. Then move the test indicator to the furthest most point on the part that is practical and check for runounout. Use a soft face hammer to knock into zero runout. That being done, go back to the chuck jaws and recheck for runout, correcting if necessary. Then recheck at the far point. Continue iteration until you get zero runout at both places.
 
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