First, you should tighten the locknut beyond snug, until turning the wheel becomes difficult. It may feel like you're ruining the races, but you're not. This is required to seat the races and squeeze excess grease from the raceway and provide a base point for setting preload. Not going through this exercise can result in a false preload setting and races that move during use, both which result in excessive clearance and reduction of bearing life.

Once the abovementioned exercise is done, then you can back off the nut until slack - probably a quarter turn like you mentioned - and set the preload.

If you won't be using a dial gauge to set the preload, it's probably best to tighten the locknut finger tight (no more), then tighten the locknut.

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95 E320 Cabriolet, 169K