If you are using it with a launcher, you should create openfire.vmoptions file. If you are using it as a service - openfire-service.vmoptions.
Important! This shouldn't be openfire.vmoptions.txt It must be of the extension vmoptions. You can do it while saving in Notepad and specifying the name of the file in quotes: "openfire.vmoptions".
When it works it should show around 900 MB of free JVM memory.