First of all you have to decide what height above rail level you want your Kadee couplers to be. There are two schools of thought, one of which uses the Kadee standard height (which the other says is correct for 3.5mm scale), and the other which fits them higher, but "correct" for 4mm scale.
I use the Kadee standard coupler height, which means that they protrude a little bit below the buffer beam.
For stock with NEM coupler pockets I use No. 17 on wagons, and No. 19 or
20 on coaches. For others I generally use No. 5, but I will use anything that is appropriate.
I try to ensure that a line drawn between the front of the buffer faces crosses within the opening part of the coupling. The stock should be coupled closely together, but not too closely that derailments happen on sharp curves or S bends (such as through a crossover).