I don't believe there's any real way you "supposed"  to hold or shoot a bow. There's all sorts of styles. 
I hold the bow with my thumb and first 2 fingers. I usually make bendy handle bows for myself, with 2-3" handles, but only slightly narrower than the bow.  If the bow is for someone else I make a  4" handle. 
I'm sure a 1" handle would work, but you'd need a real awkward thick spot in the belly.