The device should be mounted in an open area outdoors where it will be exposed to unobstructed rainfall, but not in the path of sprinkler spray. It is typically installed near the roof line on the side of a building so that trees, overhangs and awnings are not blocking direct rainfall onto the rain shut-off sensor.
Check orientation of sensor when attaching the bracket. Avoid mounting the sensor in a sunny, southern end of a building because it may cause the water in the sensor to dry out sooner than desired. Similarly, mounting on the northern end of a building with constant shade may keep the sensor from drying soon enough.
The closer the rain switch is to the controller, the shorter the wire run will be. This will also reduce the chance for wire breaks. Wires from the rain sensor attach to an indicated wire terminal in your irrigation controller.