Letoff should be adjusted primarily by twisting that top cable. The draw stop peg should be used for extremely fine tuning.

It is EXTREMELY important to have an accurate scale to weigh draw weight, and holding weight when doing this, as well as a calculator to calculate letoff percentage. If you accidentaly increase letoff past 80%, you risk having the bow "lock up". This is when the cams come past the full draw position and end up stuck there, which is extremely dangerous and will almost certainly damage the bow. If you aren't comfortable with this, I would bring it to a proshop and have them check and adjust it for you. You will also probably have to increase letoff to compensate for added pressure on the cable if you have a drop away rest tied into the cable, or an aftermarket cable slide that pulls the cables over more.