When installing a chain link fence, the top of the wire should follow the top of the rail. The fabric (the chain link) should protrude over the top of the top rail no more than half a diamond. The ties that hold the fabric should be tied from the edge of one diamond to the other edge of the same diamond (more on this later). The diamonds, when looking down the line of the fence should create lines that run fairly straight. The process of doing this is called grading the wire (more on this later also).
In this picture, you can clearly see that the company or crew installing this fence had little clue or care as to where the wire should be in relation to the top rail.