heating problem coolant light

[dhariwal57]

Hi. My car heats up in slow moving traffic specially during peak hours and sometimes the temp can almost raise upto 120. But the moment car moves faster the temp starts dropping. After the car heats up the first time then engine knocks more often during the ride and sometimes smoke comes off the exhaust. Attached are the pics of temp needle and car (year 1986).
Also the coolant light stay on regardless if water level is filled to correct level.
Also I am loosing 1 Litre of bottle daily but can't see the leak.
Will appreciate any help.

 

[Nthkentman]

Reverse flush the cooling system and refill with correct dilution of anti-freeze etc then see if the situation changes, Check fan(s) operate properly