Courtesy of IntownBicycles on Youtube
Instructions
How to Tell if Your Derailleur Needs to be Adjusted
You will know if your derailleur needs adjustment if the shifting is hesitant, your bike throws the chain when shifting, or if it doesn't shift at all.
How to Adjust the Derailleur
Set position of Derailleur: Put the chain on the rear in the biggest cog to ensure that you don't encounter the effects of cross chaining. In the front make sure that you put the chain on the smallest ring because this will help reduce the tension on the gear cable. If the cable is too tight after shifting to the small ring, you can loosen it more by unfastening the cable near the anchor bolt. Loosen the mounting bolt in order to make the positioning adjustment. Position the derailleur so that it is parallel to the chainrings. The derailleur needs to be three millimeters above the chainrings. When completed, retighten the mounting bolt.
Setting the Cable Tension: If the shifts between the rings is hesitant, then you need more cable tensions to ease it. Loosen the anchor bolt and let out a significant amount of cable. To fine tune the cable tension, adjust the barrel out. If there is too much cable tension, the chain won't drop down when you try to shift. When adjusted correctly, the chain should drop crisply to the next gear.
Setting the Limit Screw: First, loosen both bolts on the cage of the derailleur, with your thumb on it. The screw that makes the derailleur move inward, is known as the low screw. If your chain keeps dropping off the rings, then the derailleur is moving too far in and is taking the chain with it. Tighten the low screw in which will allow the chain to stay on. If the chain doesn't drop down when prompted to shift, then this means the derailleur isn't moving inward enough. Loosen the low screw to fix this problem. The other screw is known as the high screw, and if it is not moving up, then you need to adjust your cable tension out through the barrel adjuster. If that doesn't work, then you can loosen the high screw. If done too much, the chain will come out on the outside. Tighten the screw to fix the problem of the chain coming outside.
High Gear Rub : To fix the chain rubbing against the derailleur, adjust the barrel out a little bit.
Now you're finished! Check if your shifting is crisp and if not, run through the steps again.