Prerequistes of WatcherNode.msi:
1. if trusted will be used for authentication it has to be installed on a machine which is already part of topology. 
2. If LiveId or IWA authentication will be used, OCSCore.msi should be installed with below command.
ocscore.msi ADDLOCAL=ALL
3. If LiveId authentication will be used Single Sign on Service should be installed.

Steps Requires to Setup Watcher Node:
1. If you have the %ProgramCommonFiles%\Lync\Watcher Node\ReadMe.txt, this means you already setup the watchernode.msi with Authentication type parameter.

E.g. WatcherNode.msi Authenticatio=LiveId

2. Set test users. If authentication type is LiveId or IWA passwords needs to be created in credential manager.
E.g.

set-cstestusercredential -SipAddress "sip:[email protected]" -UserName "[email protected]" -Password "123"set-cstestusercredential -SipAddress "sip:[email protected]" -UserName "[email protected]" -Password "123"

You can remove the credentials with below cmdlets, if necessary.
remove-cstestusercredential -SipAddress "sip:[email protected]"

3. Add target pools.
new-cswatchernodeconfiguration -TargetFqdn "pool0.vdomain.com" -TestUsers @{Add="sip:[email protected]","sip:[email protected]"} -PortNumber 5061

$targetFqdn = "sippoolsn20a01.infra.lync.com"

4. AddExtended Tests.

$e1 = New-CsExtendedTest -Name "ACP Test for antem0" -TestUsers sip:antem0@antemTenant -TestType AudioConferencingProvider
$e2 =New-CsExtendedTest -Name "ACP Test for antem1" -TestUsers sip:antem1@antemTenant -TestType AudioConferencingProvider
$e3 = New-CsExtendedTest -Name "PSTN Test for antem4" -TestUsers @{Add="sip:antem4@antemTenant", "sip:antem5@antemTenant"} -TestType PSTN

set-cswatchernodeconfiguration -TargetFqdn "pool0.vdomain.com"-ExtendedTest @{Add=$e1,$e2,$e3} -PortNumber 5061

You can remove watchernodeconfiguration if necessary.
set-cswatchernodeconfiguration -TargetFqdn "pool0.vdomain.com"

Repeat same steps for other pools.

5. To validate the topology, you can run below cmdlets.

If topology is accesible, you can run.
test-cswatchernodeconfiguration

If topology is not accesible, you can run.
test-cswatchernodeconfiguration -Topology Topology.xml