Set the dial indicator up so the point is on the compound, and the base is attached to the carriage (tailstock side). I think this is what you are asking about. The easiest way to do this is if you place a small block on the compound so that the face of it is on the center line, then put the tip of the indicator on the block. If M is the reading of the dial indicator, and H is the distance between the compound pivot and the indicator tip, then the angle is "arctan(M/H)". You can look this up in a table, but easier yet is to get a simple scientific calculator (assuming you don't already have one).
If you instead want to know what the indicator reading should be for a given angle it's just as easy, lets call our angle "Phi". Then the indicator reading you want is going to be given by M=H*tan(phi). Again, the value of tan(phi) can be looked up, or use a scientific calculator.
This method is probably only going to work for about 45degrees, after that you are going to run out of indicator room, but since you are probably dealing with angles less than that most of the time, it should work ok.