Definitions of hacking / non-hacking movement:

A hacking movement is one that stops the second hand when you pull the crown to the time-setting position, so you can set it to the second. A non-hacking movement doesn't do this.

Hack or Hacking: Describes the feature of a movement whereby the seconds hand can be stopped for exact setting of the time. Originally a military term for this feature.

Instructions:
Here's the first and most important caveat: The watch must not be fully wound. If you just wore it while playing tennis, cricket, or chopping a cord of wood...set it aside and wait 20 hours.

1. unscrew the stem to the time setting position.
2. apply a very slight reverse torque to the winding stem, not so much that the minute hand flys back, but just enough to make the minute hand move ever so slightly in reverse.
3. maintain this pressure for 10-15 seconds, do not let up.
4. the watch will stop.

Other layman instruction:
If you pull out the crown to the time setting position and then very slowly turn the hands anti-clockwise whilst putting a little back pressure on the crown, you can stop the second hand until it synchronises with your time source. Iit gets easier with practice.

To regulate your automatic watch, please put your watch on the position according to the suggestions below when leaving your watch overnight, this will helps compensate or gain for the time required.

If your watch faces up for overnight, it will gain a few seconds (if your watch has been running slow).

If your watch positioned with crown pointing down for overnight, this will make the watch lose a few seconds (if your watch has been running fast).

If your watch positioned with crown pointing up for overnight, this will make the watch lose rather more seconds (if your watch has been running too fast).

Please try this for about 2-4 weeks.

Hope this will helps regulate your automatic watch.

An automatic mechanical watch comes with manual winding mechanism. When the watch is worn on the wrist, the mainspring is wound automatically through normal wrist movement. 

The watch can also be wound up by turning the crown. To do so, unscrew the crown (some watches do not require to unscrew the crown) by turning it counterclockwise.

To start the watch after it stops completely, wind it up either by turning the crown or swinging it from side to side until the second hand starts moving. Then, set the time and date before putting the watch on the wrist.

To wind up the watch, unscrew the crown by turning it counterclockwise, and then turn it clockwise slowly. The watch cannot be wound by turning the crown counterclockwise.

The watch is wound up fully. (Turning the crown further will not break the spring.) Once the watch is wound up fully, it operates for about 50 hours or indicated by your watch.

If the watch is used without being wound up fully, gain or loss of the watch may result. To avoid this, wear the watch for more than 10 hours a day. If the watch is used without wearing on the wrist; If it is used on the desk like a clock, for example, be sure to wind it up fully every day at a fixed time.

If you use a watch that has stopped with the mainspring unwound, winding the mainspring with the crown will not start the watch immediately. That is because the mainspring torque (force) is low at the beginning of its winding due to the characteristics of mechanical watches. The second hand starts to move when a certain degree of strong torque is reached after the mainspring has been wound up. However, swing the watch from side to side to forcibly turn the balance can start the watch sooner.

Please go through the following checks, as your watch might be affected by nearby magnetism and temperature which may temporarily or lose time or stop operating:  

A. Have you placed your watch at the following magnetic products that may affect your watch?

1. Cellular phone (speaker)
2. Bag with magnet buckle
3. AC-powered shaver
4. Portable radio (speaker)
5. Magnetic cooking device eg. Microwave oven
6. Magnetic health belt
7. Magnetic necklace
8. Magnetic health mat
9. Magnetic health pillow
10.Television
11.Staying near high voltage power lines
12.Any electrical products that emits magnetic field

Solution: Please keep the watch more than 10cm away from magnetic products. It may take some time to resume back to normal.

B. Have you dropped your watch, hit it against a hard surface or wore it while playing active / extreme sports that was exposed to strong vibrations?

Solution: Please contact us for warranty issue.

C: Have you left your watch in extremely high or low temperatures for a long time?

Solution: The watch will resume when the watch returns to normal temperature.

*Seconds gain / lose per day

Before a Seiko leaves the factory, the movement is tested in five different positions:

• Crown down
• Crown left
• Crown up
• Dial down
• Dial up

The movement is adjusted in each of these positions to an average rate of between 0 and +7 seconds per day. In other words, a Seiko should never be slow but may be fast by up to 7 seconds per day. The average daily tolerances for chronometer rates are between -4 and +6 seconds. This means that even a watch that loses up to 4 seconds a day can still be called a chronometer. 

The rate is also affected by the owner's lifestyle. The automatic movement will react differently when the wearer has an extremely active lifestyle from the way it would with a comparatively quiet person. However, any deviation from the tolerances mentioned above is not so much a question of function as of adjustment and wearing habits.

A watch may well behave differently after a repair.

If your watch loses or gains a few seconds per day, you can correct it without expert aid.

We suggest the following methods to adjust gain/ lose time for watch:

Method 1:

The hairspring in the movement probably got stuck and caused the movement to gain/lose time. 

Suggestion is while you wear your watch and shaking your wrist at half the speed of the watches working frequency (3 times per second) for 5 seconds. Most customers found this solution working perfectly and now keeps time accurately.

Method 2:

The rate of a watch varies slightly depending upon its position. You can take it off at night and place it as follows:

Anything that causes a loss of energy through the gear train to the pallet will cause the pallet to impart less energy to the balance wheel, this will make the balance lose amplitude. The loss of balance amplitude will mean the balance wil take less time to complete one cycle, therefore the watch will gain time.

Also anything that causes the hairspring to become effectively shorter, such as oil or magnetism that makes two or more coils to stick together will increase the speed of the movement.

The 7s26/7S36 is a Seiko workhorse movement with excellent reliability and used across the range of Seiko automatics. According to Seiko Corporation, the 7s26 movement able to expect timekeeping accuracy to +-15s/day. According to watch expert Mr. Ikuo Tokunaga, the 7s26 movement might get as far as +45 to -35 sec./day.

However it has been known that this movement typically runs fast for a few weeks when fresh from the factory. Also it keeps better time when worn on the wrist all the time. 

The 7S26/7S36 movement is a non-hacking movement that cannot be manually wound. It beats at 21,600 beats per hour, so a tad slower than a standard auto, which usually beats around 28,000 bph.

The fact that it cannot be manually wound is a drawback as it means if you’re not wearing the watch for more than its 42 hour reserve, you’ll have to rotate it to keep it going, or keep it on a winder, or reset the date/time.

Some users report that the watch will "settle down" to a more reasonable accuracy level after being worn for a couple of months.  So, please let the watch to settle down to a more accurate level. 

Meanwhile, please find some public reports about this 7s26 Watch movement:

SKX007 200m Diver Review http://quartzimodo.com/seiko-skx007j-review/

As for the accuracy of the mechanical watches:

http://www.network54.com/Forum/78440/message/1041036706/To+JohnsQ-©+As+for+the+accuracy+of+the+mechanical+watches.

Accuracy of diver's 7S26 automatic:

http://www.seiko-divers.info/scwf/index.php?mod=103&action=1&id=988060037

Hacking the 7S26 and other non-hacking movements:

http://rongallant.com/2008/12/hacking-the-7s26-and-other-non-hacking-movements/

7S36 accuracy:

http://www.larrybiggs.net/scwf/index.php?mod=103&action=1&id=1100232592

Another review by a Seiko customer:

Initially fast 7S26 Diver:
I have one as well. When I got it first it was about 16 seconds fast a day, way too much for my liking. And gained further during night, depending on storage position.Details follow:My day is approx 17 hours long, wearing the watch whole day. I always take it off during sleeping, sleep period being 7 hours.Deviation as follow daytime first seven days: +15,+16,+11,+11,+14,+12 and +21 secondsIn adition came the night storage (position): Dial up +3, Dial down +3, crown up +4, crown down +8, crown left +11, crown right +1.As you see from numbers, daily gain varies, and I have notised it goes up when I am more active. (but not 3-4 minutes in a night). on the other hand, I do not jogg or dance. But I do swim and ski.
I tried to find a position to make the watch slow down during night with no success, it was stable fast.After a month like this I opened the watch and moved the lever slightly every day to make it slow down. Had to do it 4 times (once a day) before I was happy. Now it stays within 2 seconds a day, and every night I check with my radio controlled alarm clock. If Seiko is fast I place it dial up during night, it will loose 2 seconds. If it is 2 seconds slow, I place it crown down during night and it will gain 2 seconds. Result: very accurate, has been the last 3 months since I slowed it down.You can also see from numbers above that the fastest position is crown left (the position your hand would be especially jogging or dancing, depending on the dance ofcourse. I suggest to slow it down and then try to measure while jogging again. I think that the faster it is the higher positional and activity errors you get.