Glue the magnet onto the rotating object to be measured. Be sure it is centered. Epoxy is useful for this step.
Place the PCB near the magnet. When the sensor is too far away from the magnet or not alignet with it, the onboard LEDs will be lit. Move the sensor around a bit until the LEDs turn off.
When the LEDs turn off, rotate the object with the magnet. If you see the LEDs flash it means that the assembly is still not fully aligned. Adjust until you can rotate the magnet without seeing the LEDs flash.