Both. Some fuel tanks give you a diagram of how to set it up. The most critical element when setting up your tank is to cut the line to the clunker the right length. Try to cut it so it doesn't touch the back wall of the tank. Leave it short about 1/16 to 1/8 inch.

Most plans will give you the proper height of your fuel tank. The basic rule of thumb is to mount the tank so that when the plane is level, the centerline of the fuel tank is at the same height or slightly lower (no more than 1/2") than the high speed needle valve. You should also keep the fuel tank as close to the back of the engine as possible so the fuel lines can be kept short.

It is also a good idea to wrap your tank in foam prior to installing it into the plane to prevent fuel foaming.