Usually the timing marks on the timing cover are marked as to what line is what. One should be marked 0.

You are correct that you need to know if the piston is in the compression stroke or the exhaust stroke when you align the distributor. If you have it 180 deg out the motor will spit and backfire. It will not run that way. Then position it with the rotor pointing at the #1 wire position. As u said, turns counterclockwise with the firing order 1 8 4 3 6 5 7 2. You should be saying the firing order in your sleep