Loosely grip the neck of the guitar at the first fret. Let the neck sit in the natural V formed by your thumb and forefinger, not flat against the palm of your hand.
Don’t grip to tight; you should be able to freely slide your hand up and down the neck.
Your forearm should be almost at a right angle to your upper arm, do not raise your shoulder to achieve this position. Shoulders should be level and relaxed.
Top right hand tip
This is the best ‘in a nut shell’ explanation for achieving the perfect right arm and hand position I have come across.
Imagine you are going to shake someone’s hand, extend your arm for the shake…. That’s the position right there! Holding that position slightly clasp your fingers, place the pick on the index finger, clamp shut with the ball of your thumb and pull the hand in to the face of the guitar… see what I mean?
It is vital that you adopt the correct right hand position. Place your right arm in the normal downward strumming position. At first, the right hand should be straight in line with the forearm and no bend in the wrist. Now, bending slightly at the wrist rotate the hand to the right forming just under a 45ºdegree angle to the forearm.
When in position place the index, middle and ring fingers on the 3rd, 2nd, and 1st strings respectively with your thumb resting on the bottom E string. Now one by one pluck the top three strings with the appropriate finger, your hands position should allow you to pluck the strings perpendicular to the guitar, that is straight up, not at an angle. To achieve this you may need to very slightly rotate your right arm to let your hand fall over the strings.