The sand really goes inside the pool wall - the wall holds it in.
You are right, sand can shift. I have also seen the 45 degree rule CarlD mentioned.
It's best to dig down to undisturbed soil, if you must build up, a block retaining wall filled with compacted base material (crushed concrete comes to mind) would be the way to go.
You can also dig to level then hold the high side back with a retaining wall. You'll probably have to dig quite a bit larger than you already have to build the wall.