Similkameen Dreams Studio provides finger style guitar lessons - beginner and intermediate (folk pattern picking, flamenco rasguado, country thumb and fingers brush, arpeggiated patterns, Travis picking, melody over chords, folk baroque, classical technique); computer electronic notation (software, midi, composition); and, creative song improvisation techniques.
There are various ways of holding the guitar, and all work. The key requirment is that you maintain good posture as you play. Over time, poor posture plays havoc with your body, and you can develop repetitive strain injury.
Having said that, here is how I hold it. This method was learned from a Flamenco teacher a quater of a century ago.
Assuming that you are playing a standard right handed guitar, keep the neck of the guitar on your left. Play the frets with your left hand to make chords, scales and riffs. Pluck or strum the strings with the right hand.
The common variations on this include: