A properly adjusted chain is not only important for a great running bike, it's crucial for preventing damage,
or even worse, accidents. too loose or too tight is no good, using this method makes checking your chain
tension very very easy.

Motorsports Forum. - Chain Adjustment.

To properly adjust your chain you must first determine minimum chain slack,
(you will only have to do this once) place the bike on a crate or on it's
centerstand so the rear suspension is fully extended, remove the shock or
unbolt the shock in such a way that allows the swingarm to move freely
upward, using a scissor jack raise the swingarm up until the countershaft sprocket, swingarm pivot and rear
axle are all perfectly aligned.

If your axle is hollow you can place a screwdriver in the axle as a point to jack from or mount a "C" clamp to the swingarm, before adjusting the chain make
sure your swingarm pivot and rear axle are parallel by measuring the distance between them on both sides of the wheel, at this point note any discrepancies with the factory chain adjustment markings on the swingarm, with
the axle
pulled back tight against the adjusters adjust the chain with a small amount of slack, say 1/2" of movement,
spin the wheel so you can get a good feel for
how tight the chain is, there should not be any binding or tight spots you
want it nice and smooth, if you can't achieve this smoothness without a reasonable amount of
slack replace the chain and sprockets and
start over, tighten the adjusters and axle tight, reinstall the shock, now you
can take the measurments you'll be using for your regular chain adjustment.

Always measure in the same spot and always use the lower run of chain, somewhere near the middle
of the chain make a mark on the swingarm, or use any identifying mark that you'll remember, with the ruler in
your hand set it on your mark and hold it flat against the swingarm, slide the ruler down so it's
now level with the chain, you'll be laying on your shoulder on the floor at this point, holding the ruler with one
hand use your other hand to push the chain
up toward the ruler and note the amount of movement, this distance will
always be your minimum chain slack, increase this amount for riding in mud,
from this point on it's a piece of cake checking if your chain needs adjusting.