I believe the correct setting is about 6 clicks on the handbrake lever and the automatic adjusters should work by themselves afterwards, You should change the brake fluid completely, takes a small pipe and jar, dont press the pedal to the floor, press is halfway only. if you press it to the floor you may rip the piston seals as it goes into unmaintained area of the master cylinder which usually rusts out because the brake fluid is not changed in time.
Make sure to keep the catch jar above the level of the bleeder valve to ensure no air bubbles can back into the system.