I'm running a site on my local network which I would like to access via a reverse proxy to a domain I purchased on namecheap. I'm using nginx on my freenas machine. The site is running locally at 192.168.1.7:8080. I do not know if my conf is correct or how to set up namecheap so that I can go to mysite.mydomain.com or mydomain.com/mysite. Any help would be greatly appreciated. Below is the conf I made.

worker_processes 1;

events {
worker_connections 1024;
}

http {
include mime.types;
default_type application/octet-stream;
sendfile on;
keepalive_timeout 65;

server {
listen 80;
server_name www.mydomain.com;

location /mysite {
proxy_set_header Host $host;
proxy_set_header X-Real-IP $remote_addr;
proxy_set_header X-Forwarded-For $proxy_add_x_forwarded_for;
proxy_pass http://192.168.1.7:8080;
}
# redirect server error pages to the static page /50x.html
#
error_page 500 502 503 504 /50x.html;
location = /50x.html {
root /usr/local/www/nginx-dist;
}
}
}