Make sure the bike is level on the trainer. Then hop on and pedal a bit to warm up the muscles. Stop pedaling with one foot at three o'clock. Have your assistant level the crankarm and the pedal. Adjust the seat fore and aft on the rails until the plumb line bisects the pedal axle.
Comfort is the deciding factor.
Sit and spin on the trainer and see how it feels. Or videotape yourself and see how you look. On mountain bikes, the right reach usually places the bars an inch ahead of the hub. Comfort is key. If all your weight is on the seat and every bump feels like a kick in the pants, you're sitting too upright.