I always recommend that the bubbles boiling away should be level with the base of the collection cup, at least at first. As the protein skimmer pulls out waste, it will build up and rise up the vertical tube and spill over into the cup. This is a good starting point. Keep in mind that things you add to the water (oily food like PE Mysis) will collapse the foam in the skimmer body, and the weather outside shifts the barometric pressure which can cause a skimmer to overflow unexpectedly.
You can watch my protein skimmer video for a number of useful tips: