Originally Posted by FBinNY

The method of wrapping the two largest and adding 1" gives you the shortest length chain that's safe for your drive train. Any shorter and you risk damaging the drive train if you accidentally shift to the big/big combination.

But you can generally go longer.

To find the maximum length that allows all combinations to work, thread the chain through the RD and onto the small/small combination, then pull the chain together until the RD rotates enough that the lower loop clears the upper pulley and splice there.

Anything between the shortest and longest is OK, and some, including myself, prefer to go longer in case we ever need to cut out a damaged link and resplice.