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The piston in an engine has 3 basic functions:
Parts: Piston, Gudgeon Pin, Piston Rings, Connecting Rod
The top of the piston is in contact with the combustion and so gets hot, the lower skirt of the piston is much cooler. This temperature gradient across the piston can increase stress.
The piston changes direction at the top and bottom of the stroke resulting in high forces on the gudgeon pin, bearings and conrod.
Keeping the piston ring close to the top of the piston will reduce the possibility of unburnt fuel being trapped around the outer edge of the piston. This unburnt fuel may over time build up and cause sticking of the rings or even irregular combustion. In full size emission controlled engines this can result in high hydrocarbon emissions, but with model engines this is not usually an issue.
See also: Pistons and Liners.