Normally, we measure incidence relative to a fuselage reference line, usually down the center of the fuselage, as opposed to the thrust line. Positive incidence is always leading edge up.

Some people get confused and think that positive incidence in the stab means the plane will nose up. This is not correct. Positive incidence in the stab will cause a nose down pitch.

Incidence is used by the designer to correct aerodynamic problems he sees in the plane. A lifting or flat bottom airfoil will cause a climb at full power so he adds in positive stab incidence to cause the tail to raise as speed increases, countering the climb tendency. We in RC tend to over power planes so many times we need to make adjustments ourselves. One example is to lower the wing incidence on a trainer to reduce the climbing tendency with a .46 size engine. (Most trainers were designed for partial power with a plain bearing .40.) Raising the trailing edge with a couple of "popsicle" sticks under the TE normally does this.