This is a very common concern. I'm not talking about the gain control on a microphone preamplifier or a mixing console, because that is something rather different to what I would like to deal with here. I am talking instead about the many items of musical and sound equipment that feature input level controls. And of course the equipment that feeds the input level control - maybe it has an output level control. So do you set output high, input low? Or maybe output low, input high? Or maybe both of them somewhere in the middle. It's all guesswork, isn't it?
No it's not guesswork. Nine times out of ten, this is what will give you the best results...
Always set the output level, of everything, as high as it will go. Don't back it off out of caution, turn it all the way - to '11' if necessary. That doesn't include the power amplifier!
Now you've got that fixed, it's the simplest thing in the world to set the input levels correctly, starting from the signal source, working through the chain to the eventual destination. Generally speaking, you set the input level as high as you can without getting distortion.
But there is one little point to watch out for. Often, a piece of equipment will have an input stage before the input level control. If you overload this, then you'll get distortion. And turning down the input level can't help, because it has no control over this stage.
The thing to look out for is having the input level extraordinarily low. This is always a warning sign that needs checking. If this does happen, then this is the time to back off the preceding output stage. Knock it back to halfway and try again.
All of this is simple and logical. And when you have mastered level setting in this way, then you will realize that the correct position for the level control on the power amplifier is all the way up. Really. And you'll control the level of the speakers from the mixing console, which is exactly the way it should be done.
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