The mercury switch for my alarm is glued (silicone) on top of a small beeper/buzzer. If you plan on using a buzzer or siren, it's convenient to have the mercury switch close by but not necessary. My switch w/ beeper is installed in the middle of the bike close to the battery. If you plan on using the bike's horn, then I suggest you glue the mercury switch to a piece of plastic or something that can be moved and adjusted.
The mercury switch must be installed with the wire connections facing the direction the bike will be moved (away from kickstand position). As you tilt the bike up (away from kickstand side), the mercury will move to the other end of the switch and touch the two wire connections causing the alarm to sound. When the bike is moved to rest position (w/ kickstand), the mercury moves away from the contacts and breaks the connection which cuts off the alarm. Can you steal a bike without moving it off it's kickstand?
If you wish to have the alarm sound longer, substitute the mercury switch for a shock or spring loaded switch. With this type of switch, vibrations from the movement of the bike will cause a spring loaded contact to move inside the switch and will sound the alarm until the vibrations die away. (This may give an additional 5-30 seconds of warning).
If you wire the alarm to the battery, then I suggest using an in-line fuse.
The push button on/off switch which cuts the power completely off to the alarm should be wired in a location that is easily accessible but out of sight from potential thieves. The switch could be placed inside the storage compartment, but having to open and close it every time you ride will get old. The push button on/off switch could be substituted for a keyed switch. The only drawback is you'll have one more key to carry.
I tried using two small buzzers glued back to back but I liked the beeping sound better. Cost of mercury switch was $3.50. The job took about 4 hours but a lot of time was spent looking for a location for the mercury switch and on/off switch.
