The lower the clip on the needle, the higher it is raised out of the jet. Hence, less needle in the jet, more fuel gets through and the richer the fuel/air mixture.
We usually recommend the second groove from the top as a good ballpark starting place. But, keep in mind that the needle and clip position has nothing to do with wide open throttle (WOT) performance. With the throttle slide raised to its maximum position the needle is out of the jet and fuel flow then is determined only by jet orifice size. From about 3/4 throttle and up, the needle has nothing to do with fuel flow.
Tom