The Feedback Loop IN DEPTH:
The feedback loop is where some amazing stuff happens. To insert an effect into the loop, simply connect a cable from the Send of the loop to the Input of an effect, then connect a cable from Output of the effect to the Return of the loop. Now, turn the Feedback switch on to engage the self-oscillation.
Three categories of effects that tend to be effected consistently:
1) Distortion / Fuzz / Overdrive - For the most part, these effects will generate a feedback tone that adds both depth and slight fluctuations to your guitar's signal depending on how, and where on the neck, you play riffs and chords. The feedback knob tends to alter the pitch and intensity of the feedback tone.
2) Delay / Reverb - Self oscillation and delay go hand in hand. Have you ever heard of a delay, that as you increase the feedback knob on the effect, the delay keep going and going, louder and louder, until all you hear is a wall of pulsating noise? Well, not all delays can achieve this, but with the help of the loop, many can. For the most part, the feedback loop will make delay effects feedback into aforementioned wall-of-noise.
3) Chorus / Phase / Flange - Many modulation effects have a knob labeled "Resonation" or sometimes even "Feedback". The feedback loop has been known to act in the same way as this control, adding a bit more resonance and sharpness to modulation effects.
The photo-sensitive Eye:
Next to the foot switch, is a small clear covering that houses the photo-sensitive Eye. Make sure the Feedback switch is in the on position. Now turn on the Eye switch. There will most likely be an alteration in the sound of the feedback loop when the photo-sensitive Eye is on.
The photo-sensitive Eye effects the intensity of the feedback loop just like the Feedback knob. Being a photo-sensitive device, the Eye can vary the intensity of the feedback loop depending on many factors involving the lighting condition of the room you are in. It is generally suggested that it be used in a setting with a decent amount of ambient light, but with a direct light source positioned over the photo-sensitive Eye.
With the above setup in place, you will find that by moving your hand or foot over the eye, you can alter the sound of the feedback loop in a very manual and organic way.
Though the above setup is recommended for maximum control over the feedback intensity, it has also been suggested to try alternate setups such as a dark room with a single spot light over the photo eye, or complete darkness and a strobe light or other flashing light source angled towards the photo-sensitive Eye.
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