1000 ways to skin the cat. Bear that in mind, there are a lot of ways to indicate a barrel in that will result in a hammer. Obviously there's also a lot of ways to fuck things up...
What I like to do is have a 4-jaw chuck and a 4-screw spider that are clocked to each other. In other words if one of the jaws on the chuck is at TDC, at the same time one of the screws on the spider are at TDC. It's not entirely necessary but it can make thing simpler. Numbering jaws/screws if they're not already is helpful, too.
I put brass pads between the barrel and the chuck jaws to act as a pivot point. I've seen people use thick copper or aluminum wire, also.
I like to take a long stem indicator (indicator stem at least 1" long. Longer is better, IMO) and place the ball on the indicator stem into the bore so that it's directly over the brass pivot pads that are on the outside of the barrel. I will then spin the spindle by hand and indicate that location in to <.001" TIR using ONLY the chuck. I usually go off of the grooves because there's a greater percentage of the circumference in the groove vs. the lands. You'll see it bounce between groove/land as you spin the spindle. I don't touch the outboard spider this entire time (other than initial setup, and eyeball centering the muzzle end in the spider).
After the pivot point is dialed in, I move the indicator out to the breech end, maybe 1/8" in from the breech face, and dial it in using ONLY the outboard spider.
4/5 times you're done at that point. Go back under the pads and double check that you're still running true. Sometimes it will move a little bit. Re-adjust the chuck if it has moved off of center, then go back to the breech, rinse, repeat as necessary.
That all being said... I've seen guys do it by indicating off of 2 points on a rod they stick in the bore. I've seen people indicate the muzzle end to <.0005" TIR via the spider then the breech end to <.0005" TIR via the chuck. At Long Rifles Inc. they toss the muzzle end into a collet that slides into the spindle bore and hope for the best, then dial in at one position on the breech end. I've seen where people will chuck up the muzzle end, hang the whole barrel over the bed on a steady rest, then ream it by hand... floating reamer holders, fixed tooling, coolant flows on the tooling, from the muzzle......
Like I said, everyone finds their own way that makes sense and most of the time as long as you're using your noodle just a little bit, it works out fine.