This is how I do it. Others have different opinions.
There’s no dial-in string height nor truss rod setting that will be the same for everyone. The instrument has to be adjusted to suit your own playing style.
Make adjustments in the play position so gravity doesn’t enter the equation. The best way is to be seated with the instrument on your lap.
Adjust the truss rod to get the neck as straight as you can. Turn the truss wheel (capstan) clockwise (as you look from the heel of the neck towards the headstock). Use the shaft of a small screw driver in the capstan wheel holes. To be on the safe side, loosen the strings between each adjustment and retune to pitch. Use a finger of your fretting hand and depress the E string at the first fret. While doing this, use the thumb of your right hand and depress the E at the 12th fret in such a way that the middle finger of that hand is pointing towards the first fret and use that finger to depress the string at the 5th or 6th fret. Aim for a paper thickness gap (or even less) between the top of the fret and bottom of the string at that point. That’s the starting point for the neck. It may need finer adjustment latter.
If, at any time, you feel excessive resistance on the truss wheel, PROCEED NO FURTHER as you could permanently damage the truss rod. Take it to a tech.
For a comfortable feel of the strings, their height should reflect the radius of the neck. At the 17th fret, measure the height of each string between the top of the fret and the bottom of the string. Don’t depress the first fret for this measurement. Using a 6 inch steel rule, aim for 3/32 inches on all strings consistent with no fret buzz and comfortable height. Depending on your playing style, you may be able to set them lower or may need to set them higher. Tune to pitch and check the strings all up and down the neck.
If you find the strings buzz at the first few frets only, begin adding relief to the neck by turning the truss wheel, in small amounts, counter clockwise until the buzzing goes away. There’s no need to loosen the strings for this adjustment (you’re loosening the tension). That is your truss adjustment.
I usually like my strings (on the G side) slightly lower than the preceding ones. After setting all strings to the same height, I lower the G ¼ turn and lower the in-between (A and D) strings down proportionately to meet the G.
After adjusting your action you should readjust the pickup. While depressing the E string at the last fret, measure the distance from the bottom of that string to the top of the pickup magnet for that string. Adjust for a distance of 4/32 inches. Do the same with the G string but, this time, aim for a distance of 3/32 inches. Final adjustment may have to be made to the G side by ear, so that the volume is even across all strings.
After you’ve done the set-up, small adjustments to the truss rod can be done latter, either counter clockwise or clockwise without loosening the strings. You’ll find this necessary during seasonal changes throughout the year.
Generally, if the strings buzz only at the first 4 or 5 frets then neck is too straight for your playing style. If it only occurs past the 12th fret then you have too much relief (bow) in the neck. If you find the strings buzz all up and down the neck, then the relief is ok but the strings are set too low.
