Text originally from the Easterley Road Club. Original text HERE.
Getting the correct position on the bike makes for a more comfortable ride. If you do not choose the Bioracer option described in a previous section, then the following paragraphs will give you a guide.
Saddle height is set by putting your heel (in cycling shoes) on the pedal and with the crank at its lowest point there should be a slight bend at the knee. In this position you should be able to pedal with your heels without rolling about on the saddle. If you are using shoes which have extra thick soles, that you may have to raise the saddle slightly to compensate.
Next set the correct foot position on the pedal. You should always pedal with the ball of your foot over the pedal spindle. This is where toe clips or clipless pedals help as they place the foot in the correct position when pedalling. Adjust the shoes plates forwards or backwards until your foot is in the correct position.
The Lateral position (forwards or backwards) of the saddle should be adjusted next. With the cranks set horizontally and your foot on the pedals in the correct position, a plumb line hanging from just behind the kneecap (i.e. at the pivot point of the knee) should hang vertically through the pedal spindle. Adjust the saddle forward or backwards until this happens. Get someone to help you with this.
The saddle should be horizontal for general riding, however for time trials when the position tends to be lower, you may wish to tilt the nose of the saddle down slightly to give a more comfortable ride.
This is often a case of trial and error before settling on a final position and a lot depends on the riders flexibility and the type of riding they will be doing than on any hard and fast rules.
Handlebars should in general be the same width as the riders shoulders.
To approximate stem length, place the back of the elbow against the point of the saddle and, with the middle finger resting on top of the stem, there should be a gap of 1-2 inches between the end of the finger and the centre of the handlebars. For road riders, the top of the stem is normally set about 1-2 inches below the level of the top of the saddle. When riding with your hands on the brake hoods, look downwards and , if you cannot see the centre of the hub of your front wheel, then the stem length is about correct.