The only correct answer is whatever you feel comfortable with, but I'll give you more than that.

Most pros seem to hold their whole forearm on the table. I think its because then you always get the same kind of axis for your mouse movements and might be more comfortable, but at first, for me it felt weird after being used to always having only about a half of my forearm on the table, so it may take some time.

The couple of things that finally settled my arm positioning down after about a year of playing a lot of CS was changing my mouse grip and figuring out what a nice elbow cushion can do.

To be more specific I used to hold my mouse like everybody else (index finger -> m1 + middle finger -> m2), but I switched to having my middle finger on the scroll and ring finger on m2. With the old style my grip would always be kinda different whenever I picked up the mouse and right side of the mouse was crowded with ring and little fingers, which I believe led up to some unecessary friction on the mousepad. (yes I am that much of a nerd). Also for me the "new" grip kinda raised my forewrist off the mousepad so.. less friction! Less friction = more consistency, or so my 420 logic would tell me..

Didn't hear enough about some random LEM's arm friction and consistency? Great! So the arm cushion I use is a folded up pillowcase (can be whatever soft but kinda thick really), I fold it up so it has 1-2cm+ solid fabric there. I place it on the edge of the table before the mousepad (can be on it if space is scarce), and just put my elbow on it. Now I always have my elbow on the same spot instead of just randomly placing it wherever when I would start to play, but the best part is that my elbow and thus the whole forearm is raised off from the mousepad.

I even feel this gives me a great deal more aim consistency (less friction again!), and lets my elbow move freely on a nice cushion. The whole deal about friction might honestly be imagined, but I feel like when I used to have my whole arm on the mousepad large movements and flicks sometimes would get randomized by sweaty stickiness or just from the friction from dragging the whole forearm across thew pad. The cushion just completely removed that aspect for me and I feel like I can do the forementioned movements quicker/smoother/more consistently. I honestly don't know why I don't see or hear more people with something like this :D