The direction -- up or down -- to close blind slats is a matter of personal preference, but if you want more privacy, tilt them up, with the rounded side facing out. With the blinds tilted up, passers-by can't see in: The convex side faces the window, creating less space through which to view. With the rounded side facing in and the blinds turned down, it's easier for prying eyes to see in the room at night, especially when it's lit from the inside.
Reasons to Turn Them Up
With the slightly rounded side facing out, and the concave side facing in, you have better light control in the room with the blinds up than if you were to turn the blinds to face down. With the blinds facing up, the inside appearance may not be as appealing as when they're down, but you reap greater privacy benefits. But, since some faux wood blinds have only the top edge finished, the bottom, unfinished edge is hidden when they are in the turned-up position. Most people give thumbs-up to blinds in the up position.
Turn Them Down
Blinds with the top edge turned down and the rounded side facing the room give window blinds a more aesthetic pleasing look, but what you gain in attractiveness, you give up in privacy. Blinds in this position also direct more heat and light into the center of the room. The rounded side facing the room also makes blinds appear softer, while it creates larger gaps between the blinds.
The position in which you set the window blinds also affects energy efficiency in the home. With the blinds tilted up and the rounded side facing out, the heat in the room moves toward the ceiling -- a better position for blinds in the summer. This position helps in reducing energy bills when you keep the blinds closed during summer's dog days.
In the winter when the sun is out, open the blinds to bring sunlight into the room, or set them so the rounded side faces the room to move warmer ceiling air closer to where it is needed. With the blinds facing up, outside sunlight and radiant energy are deflected skyward, and heat is directed away from the living spaces of the room.
Blinds installed inside the window frame offer more warmth in the winter than when mounted on the exterior of the window frame. With the blinds inside the window and closed, a cushion of air is created between the blinds and the windows that adds a slight insulation factor to them. It keeps the colder air against the window. But you use less air-conditioning when the blinds are installed on the exterior of the frame, because less solar energy penetrates into the room. In the end, both the mounting position and the slat position of your blinds depends on whether you live in hot or cold climate, in the city, suburbs or country.