The best place to take a "health" reading of the transmission temperature is, as stated, plumbed in to a T fitting at the outlet line to the cooler. This is as hot as it's going to get.

You can plumb a second sensor into a T fitting at the end of the outlet line as well, if you want to measure cooler efficiency (delta-T across the cooling element.)

DO make sure you plumb the sensor in such a way as you have constant fluid flow over the sensing tip, or your reading will be invalid. This applies to any fluid sensor, gaseous or liquid, viscous or not. If the sensor tip is in a "flow pocket," it's going to be stuck well behind in its reading. Most sensor tips reach far enough that they can go into the "branch" on a T fitting, with the flow across the arms.

A 3/8" NPT T fitting should serve handily - most temperature sensors are 3/8" NPT, and most lines are 3/8" ID - 3/8" hose barb to 3/8" NPT fittings are common. Use brass - it won't seize, it won't rust, and it will be easier to service later. And it's not reactive to pretty much any fluid used in a vehicle.

 

to the guys who mentioned something, when towing or going through hills, I can feel the trans get hot through the floor board, thought it would be nice if I can see whats going on so I can pull over if needed

 

no reason really