In order to improve the measurement sensitivity of ferrous wear debris sensors with a permanent magnet, a new numerical approach to the appropriate position of the sensor is presented. Moreover, a flow guide wall is proposed as a way to concentrate flow around the ferrous particle sensors. The flow guide wall is intended to further improve measurement sensitivity by allowing the flow containing ferrous particles to flow around the sensor. Numerical analysis was performed using the multi-physics analysis method for the most representative gearbox of the sump-tank type. In condition diagnosis using ferrous wear debris sensors, the position of the sensor has a great influence. In other words, there are cases where no measurements occur, despite the presence of abnormal wear and damage due to the wrong sensor position. To determine the optimal sensor position, this study used flow analysis for the flow caused by the movement of the gear, electric and magnetic field analysis to implement the sensor, and a particle tracing technique to track particle trajectory. The new analysis method and results of this study will provide important information for selecting the optimal sensor location and for the effective application of ferrous wear debris sensors, and will contribute to the oil sensor-based condition diagnosis technology.