The skimmer should always be higher than the highest point of water in your sump (when the power is off). Otherwise, you will end up with overflow issues.
In terms of feeding the skimmer, the rule of thumb for this skimmer is 1.5-2 times your water volume without exceeding 3380 gph. Anything above that and the skimmer will overflow. Remember that there is only so much water can freely go through the skimmer before it overflows form the top.