ORIGINAL: w8ye
You set up a degree wheel and pointer with Zero at Top dead center. To do this, use a piston stop and split the difference from the approach to top dead center from each direction. With the ignition on, you slowly move the crank shaft in the direction of rotation until you hear the ignition fire. Note the location on the degree wheel. From my experience, 28 degrees BTC is my magic number.
The position of the sensor is adjusted to adjust the timing.
By trial and error, you try the timing in several different positions of advance until you find the maximum rpm obtained.
That procedure works for engine using an ignition which RETARDS electronically
the ignitions on some designs do not work that way
if the setup has no provision for moving th pickup -leave it alone - these ignitions typically start at a low advance then- as design dictates -the rpm will determine advance .