Your arm should be positioned directly under your shoulder in Side Plank to get the most out of this pose and to avoid strain on your shoulder joint.
How do you know if your arm is placed properly in relation to your shoulder joint and body?
1) Measure the distance between your shoulder and heels. You can do this with a measuring tape, or by laying down on your Gurugrid mat. Once you plot these 2 points, you have your placement points for your hand and heel.
2) Have your yoga teacher check your pose for correct positioning and make any adjustments. You can be sure that you have found your placement points. :)
The same thing goes for poses like Plank, Table Top, Reverse Plank, Reverse Table Top, Cat, and Cow. These poses don't put as much pressure on your shoulder joint as Side Plank, but it never hurts to determine and use the proper positioning to get the most out of your yoga practice and maintain a healthy body.