Just follow the top radiator hose to the thermostat housing on the enginee.
Make sure you put it in the right way, as shown.
A flucuating gauge needle is often a sign of a bad thermostat---you can easily test it by placing it in a pan of water and heat it up---see if it opens. If it looks dirty or corroded in there, just replace it. Also make sure your temperature sensor connections are clean and tight.