How do I tell if my tension is correct?

First look at the top side of the fabric. Are the stitches laying flat? Is there bobbin pulled up to the top?

If the top side of the embroidery looks good, usually there are no adjustments necessary.

If the stitching looks loose or loopy, the top thread may need to be tightened for that particular color.

If bobbin is being pulled up from the underside then either the top tensioning is too tight, or the bobbin tension is too loose.

If the top stitching is pulling the fabric so that it puckers, then the tension may need to be loosened for that color.