A pocket watch and chain add a nice touch to a waistcoat (vest).

I prefer to put the watch in the left hand pocket (I'm right handed) and drape the chain across the front. If the chain has a T-bar I insert it in a buttonhole, but if not, and its long enough, I'll thread the chain through the button hole so as to get the same effect. If the chain isn't long enough, then I just attach it to the buttonhole if I can. I don't like putting it on the lapel with the clip.

I usually thread the chain though a buttonhole at or slightly above the pocket level. However, I've examined quite a few photographs of men wearing pocketwatches and their seems to be a lot of personal variations - in short, they wore it as they wanted to. You'll sometimes see a small "token" or two hanging from the chain such as a key to wind the watch, a lodge emblem (the Masons were quite popular), etc. The small knife was usually meant for cutting off the end of cigars.

I've sometimes worn it with just a leather strap and fob, but I prefer the look of the chain.