This is my opinion concerning pocket square guidelines. My aim is to help inform the community about the nuances of wearing a pocket square, allow you to question your preconceptions, and maybe even teach you a little something about style in the process.

• First of all, a PS needs to both clash and blend with an outfit. Optimally, it does this in approximately equal parts. A pocket square should stand out while emphasizing and supporting the other elements of an outfit.
• The major color of your PS should not be borrowed from your shirt, tie, or socks. With PS minor colors, do whatever works.
• Match tweeds to wool, silk or cashmere, but not linen. Match worsteds to anything.
• PS patterns should be of a type and scale that don’t frequently occur in ties, shirts, or jackets. This means no small-scale patterns, glen plaids, herringbones, etc. Large-scale, baroque patterns (paisley, florals, large designs) might seem challenging, but they are the easiest to pair. It’s not that polka-dot squares can’t look good, they’re just less versatile than you might think.
• A wise man once said fancy folds are for fools. If there is a guide for a particular fold, it should be avoided. There are two best folds: the silk puff and the the linen TV fold. I avoid using cotton PSes, which is like putting a shirt in your pocket. Points shouldn’t show, they look sloppy and are quickly misshapen. I know that this advice flies in the face of what you’ve heard and what you’ve seen, but the truth is that most pocket squares are worn in an obtrusive manner. A square should be a natural, seamless component of your outfit, not a bouquet bursting out of your pocket. With elaborate folds you risk looking both sloppy and tryhard with little gain.

Now, the concept of the white pocket square.

White linen looks okay with everything but a white shirt. I don’t like how stark and striking the combination is. On its own, a white shirt easily rests quietly in the background of an outfit. Adding a white square pulls it back to the foreground, reducing the emphasis of more important elements. That much white is distracting, creating a lot of contrast without much room for subtlety. In a dinner suit this is fine since contrast is the name of the game (I still prefer cream silk). In business and more casual situations, I want my outfit to be more comfortable to look at. Another thing about a white PS – the lack of variation in color and texture is a missed opportunity. A pocket square is useful for tying together and accenting what you’re wearing. When it matches your shirt, what was previously balanced becomes unbalanced and what was previously unbalanced is made worse. If you can’t decide on something non-white, go with cream silk which works well with nearly everything from tweed to a dinner jacket.

This whole white pocket square thing bothers everyone so I’m willing to go into greater detail. When we’re younger, the most important thing about style is matching (brown belt to your brown shoes). Style is not about matching any two elements at all, it is about cohesion. The craziest outfits still have to be cohesive. I’m going to repeat that because it is so important – at the end of the day any good outfit must have cohesion. More at the bottom of the page on cohesion and style.

Finally, remember that you don’t have to 

wear a pocket square. If you can’t make it look right, forget it. No one looks worse than the guy who obviously got up in the morning and thought to himself “Today is the day I wear a pocket square”.Keep in mind that no guidelines are absolute. I prefer to see style as an art, where you can use various techniques to bend perception, though note that outfits indeed must remain cohesive.

Disclaimer: Not all of these ideas are completely original. Like most things in style, some of the concepts were learned from others. I’ve picked up many things about pocketsquares over the years and I have clung most strongly to these tenets.

That being said, if you have any questions feel free to ask!

edit: bolded some key elements for the TLDR, attempted to shorten and organize the post

Note on Understanding Cohesion and Improving Your Style:

If you don’t know what I mean by cohesion start here and here and keep reading until you can no longer press next page. After that read these. By ‘read’ I don’t mean robotically skim everything. You should really take in an outfit – what’s wrong with it? what’s right with it? how could it be better? are those shoes Sargent or John Lobb? is that shirt Ralph Lauren or Brooks Brothers? Let yourself be impressed, disgusted and surprised. Question what you know and think creatively. I strongly advise creating a photoblog on tumblr for all of your favorites. Ultimately my point is that you should be active in your sartorial education.

source: http://www.reddit.com/r/malefashionadvice/comments/hoqe6/pocket_squares_an_alternative_opinion/