Point somewhere. The arm works out the rest.

You give it a place to reach. It solves backwards for the two joint angles that put the tip exactly there — that problem is called inverse kinematics, and for a two-joint arm it has a closed-form answer. Move your pointer over the panel.

The pale ring is everywhere the tip can actually get to: too far out and the arm can't stretch there, too far in and it can't fold that tightly.