Proper seat height for exercise bikes?

Hey guys.
 
I've been told that to find the proper and safe seat height for an exercise bike is to stand next to one and make sure that your hip bone is aligned with the bike's seat. The next step is to make sure that your knee is slightly bent when sitting down on the exercise bike. I tried following these steps and quite honestly, I felt really uncomfortable. I am so used to having the seat a little lower and than what it was today. I'm just afraid that if I sit lower, that I'll have knee damage in the long run. 
 
I don't sit extremely low. My knees are certainly higher than a 90 degree angle when I ride the exercise bike. What should I do? Should I just go back to lowering the seat height. I used to sit at seat height 'F' and now I'm sitting at seat height 'J' because that is the height my hip bone is aligned with. 
 
Thanks. 

Ditto WS

Suspirio
Sitting a bit lower will not give you knee damage. Don't analyse it too much and sit the way you feel most comfortable. Personally, I prefer to cycle standing up. I detest sitting down on exercise bikes. It does my back in.

That sounds like too much exercise for me!

I put the pedal at the bottom of the pedal stroke and put my heel on the pedal so my leg is straight this will give a slight bend in the leg when the foot is in the normal position . This seat position gives a more efficient pedal stroke. Shouldnt hurt if your seat a little bit lower