It depends on lots of things:
Where are you measuring the EGT?
Which side of peak temperature are you.
These following articles are two absolutely classic articles from Pelicans Perch.
These come from the general aviation community but they have LOTS of good info in them and I would suggest you read both articles about 3-4 times.
I have and I still learn things each time I go look at them.
The real key is illustration # 3 ( second article 4 trace chart of EGT, CHT, BHP and BSFC) that shows the relationship between max egt and power output. <---- very important chart study it!
Keep in mind most aviation engines are air cooled so they depend on cylinder head temps to help them find best power.
On a liquid cooled engine cylinder head temp is not very useful, but the EGT power and ignition timing relationships are the same.
http://www.avweb.com/news/pelican/182132-1.html?redirected=1http://www.avweb.com/news/pelican/182084-1.html?redirected=1What you need to do to keep an engine alive is to find the peak power output then back off the timing or richen the mixture just enough to detect a 1% loss of power.
This is a trial and error process that hopefully puts you on the safe side of the fuel mixture/EGT hump where you have just a small cushion in the tune.
A tune that gives max safe power after a short dyno pull will melt the engine after 2 min at full power.
Decreasing EGT can mean two different things depending on where you are in that curve on the front side of fuel mixture curve EGT's increase as you make more power but after you pass the highest EGTs (which is usually lean of best power) EGT's drop as power increases.
You need to figure out which side of that mixture hump you are on before you can figure out your detonation risk and best EGT.
If you are hot and add fuel and you are really on the lean side of that hump you will burn down the engine.
Peak EGT is usually measured just few inches outside the exhaust port (fuel burning as the exhaust valve opens and turbulent mixing in the port)
Peak EGT is usually on the lean side of peak power mixture. If you add fuel and EGT goes down you are on that rich power side of the curve.
If you add fuel and EGT goes up, you are probably on the lean side of that hump and very likely have too much timing.
This is why NACA always did their tests at 99% of max power (extensive tests had told them where the ideal ignition timing was for best power so they only fiddled with the fuel mixture)
Set a safe max power fuel mixture and find your best power ignition timing, then search for that rich best power setting for the fuel mixture.
Fuel burn speed changes with mixture, so you will have to hop back and forth a few times to find the true best power timing at your best power fuel mixture.
Good luck!
