It is common wisdom to not use any indicator which offers more travel than is necessary.
If you only need to measure up to 1/4" then you should stick with a 1" indicator at the most. If you need to measure over 1" then you have a number of options. These long range indicators have their own set of problems, are less accurate over their entire range, are more easily damaged, and beside being more costly, they will also cost more to have repaired—if you can find someone who can do this kind of work.
Do not confuse amount of travel with measuring depth. If you just need to go further into a hole or groove, use a longer contact point on your 1" indicator. Contact point extensions are available on page 133.
Whenever possible, hold the indicator by its stem. This will be the most rigid set-up. Also remember that the indicator reads accurately only when the stem is perpendicular to the measured surface. If you are off even by a couple of degrees you will start to notice reading errors. To convince yourself, just try it.
Most manufacturers instruct us to use these only in an upright position. Held horizontally or upside-down the spindle and the hand are likely to refuse to return to zero. It is simply a matter of gravity.