There are two ways to look at this question, and the first is to see it for the absurdity that it is. Your watch should fit comfortably, and that is of course entirely dependent on what you happen to find comfortable. If you love the feel of a watch strapped down slightly tightly, that’s your business and no one can tell you you are wrong. If you are one of those fellows who likes a bracelet watch to dangle loosely on your wrist, so that at one moment it’s nearly sliding over your hand, and the next, it’s halfway to your elbow, that’s your business. If you are one of those odd fellows who likes to wear his watch on the right wrist, or so that the dial is facing inward, who can call you mistaken?
The other way to look at the question, however, is to acknowledge that there really are some general do’s and dont’s.
First of all, a watch worn very loosely may be comfortable, it may be to some preferable; it is also, however, in general rather sloppy looking. For a fellow with his watch sliding six inches either way depending on the position of his hand, it is difficult to look anything other than a bit disheveled. Worn in such a fashion, the watch becomes, not an instrument to be consulted for the time, but an article almost entirely of personal adornment and at its worst such a habit reflects contempt for the pursuit of accuracy, wherein is found the basic integrity of any wristwatch. Offenders in this category are generally wearers of bracelet watches and frequently, of extremely expensive bracelet watches; the classic example of this fault is often to be found in wearers of solid gold Rolexes, who generally care very little about the time, and very much that others should be aware they are wearing a solid gold Rolex. A look more frequently sought, in other words, by tin-pot petty dictators than the sartorially alert.
However, a watch worn too tightly speaks to a certain degree of insecurity and not only may it feel uncomfortable, it will certainly look uncomfortable. When strapped too tightly, or when a bracelet is a link shy of a proper fit, the watch will look as absurd on the wrist as a too-small suit looks on the body. If you are wearing a suit too closely cut for your figure you will see it instantly when you look in the mirror, and especially if you do the equivalent, with a suit, of strapping on a watch too snugly; there will be nasty lines radiating from the overtightened buttons and everyone will know your vanity is greater than your common sense. Likewise, a too-tight watch, whether on a strap or a bracelet, will leave unsightly rolls of flesh on either side, and probably an imprint attesting to your stubbornness that lasts long after you doff the watch for the evening.
Many people tolerate an ill-fitting watch for no reason; sometimes it is purely owing to laziness. A few minutes spent properly sizing a bracelet, or ensuring that a strap closes on a hole that leaves room for movement, but not so much that the timepiece becomes unmoored on your forearm, is the first and most essential prerequisite for actually enjoying a watch. You may occasionally find that a certain bracelet, or a particular strap, simply affords no fit that is really suitable for you and under such circumstances, the sooner you recognize that a good fit is not forthcoming, the better; and moreover, the sooner you can take steps to ensure that you find some means of fastening the watch to your wrist that is both comfortable and secure.
It should of course go without saying that a gentleman when dressed for business, wears a watch that will easily slide under a cuff, and that this should not be achieved by having cuffs so loose on the wrist that you might drive a motorcar through the gap. Americans are particularly prone to be sloppy in this regard, though Italians often go to the other extreme and wear their cuffs so fetishistically snug that even the slimmest watch stands little chance of making a good showing. I should mention as well that in warmer months and/or warmer climates, a too snug fit is an invitation to sometimes very uncomfortable dermatitis, which will put you out of the watch-wearing game for as long as it takes to heal. I made the mistake of wearing a watch with a too-tight leather strap during a long walk through the bush in equatorial Africa many decades ago and still bear faint scars from the resulting rash. As in all things, happiness is most easily found in a happy medium.