Okay, in that diagram... that's what you should be seeing under the timing light now. The light flashes when that line on the harmonic balancer lines up with 0 on the indicator.
To advance the timing, check to see if your distributor has vacuum advance (if it does, there will be a vacuum hose leading into a can on the front of the distributor) and if so, disconnect the vacuum line and plug it. Make sure the car is at low warm idle.
Point your timing light at the harmonic balancer and indicator plate and make a note of what the timing is. Your indicator plate may say something other than "BTDC/ATDC". BTDC (before top dead center) is advance, ATDC (after top dead center) is retard. It might have something like "A/R" or even "Advance/Retard". It might help to take a rag with some gasoline or solvent on it and wipe off the indicator so you can see it.
Once you have the car idling and the distributor hold down loosened (don't remove it, just loosen it enough so you can turn the distributor,) point the timing light at the balancer and indicator plate, and rotate the distributor very gradually until the mark on the balancer starts lining up with the desired mark on the indicator plate. The marks in the picture I made only go up to 8 degrees, but yours are going to go a lot higher. Just set it to where you think it should be... 13 degrees, something like that, I'd say.
When you get it where you want it, hold the distributor still with one hand and tighten the hold down bolt with the other. Plug the vacuum line back in, adjust the idle speed if necessary (advancing the timing might make it idle a little higher,) have fun.