Either way works. I attend military airshows. Some of the military air frequencies use FM so I might pick FM instead of Auto. But I usually leave it on Auto as they might change from one year to the next, both frequency and/or mode. (Sometimes I may have picked the wrong mode but can’t tell the difference due to my close proximity to the aircraft. And sometimes I can discern I’ve picked the wrong mode and change it.) When set to Auto I haven’t noticed the scanner picking the wrong mode, so I’d say they got it right when they offered the Auto feature in the newer scanners. And, you can play with the settings yourself and your results will dictate what you choose.