This is an excerpt from Pool Player's Edge-2nd Edition by Gerry Kanov & Shari Stauch.
Before you get a grip on your cue, take a moment to look at your arm. Stretch your arm out in front of you, palm up, and notice how the middle two of your four fingers run in a line, through your palm, and up the center of your forearm. These are the optimal fingers in your grip hand, directing the center of power down through your arm and into your grip.
Now, grab your cue, using just these two fingers and your thumb to circle the cue. Then, let the index and little fingers circle the cue without using either of these fingers to balance your grip. Hal Mix, an instructor to several top pros, including Hall of Famer Nick Varner, advocated keeping your little finger completely off the cue, leaving it to hang daintily as if off a teacup. You don't need to exaggerate this position unless you find yourself gripping too tight with those unnecessary fingers. Keeping control of the cue with just the two middle fingers and the thumb automatically encourages a loose, comfortable hold on the cue.
The biggest mistake that players make in their grip is taking the word grip literally—attempting to hang onto the cue with too firm a hold. Strangling your cue will not offer additional control, but only serve to add jerky, uncontrolled movements to your swing. The cue should rest gently enough in your hand that the hand hangs relaxed and in line with your arm, from your elbow down. Take a look at figure 1.16 for an illustration of a controlled yet relaxed hold on the cue.
Also keep in mind that the grip doesn't end with the hand but extends to the wrist above it and the forearm above that. If the grip is perfect but the wrist is twisted, this will alter your swing and follow-through. Aim for that relaxed, smooth line from the forearm, down through the wrist to the fingers.
Where to place your grip hand on the cue will depend, in large part, on the balance point of your cue and the length of your arms. The party line has been to grip the cue a few inches behind the balance point (found by balancing the cue on the flattened palm of one hand until it tilts neither left nor right). But players with longer arms (typically taller players) and a standard-size cue will not be comfortable doing this; these players may more comfortably grip the cue closer to the butt end (farther behind the balance point). Many longer-limbed players nowadays opt for longer cues to enable them to grip closer to the balance point.
Either way, rather than focus on the balance point, you should pay more attention to the placement of your arm—the upper arm should be approximately parallel to the floor (the lower your stance, the less parallel your upper arm will appear), and the forearm, from the elbow down, should be hanging straight down (see figure 1.17). Your grip position will also change in relation to the position of your bridge hand, as discussed earlier in the section on bridges.
Read more about Pool Player's Edge, Second Edition.