The trim sender back on the engine is a variable resistance thing. You set your multi meter to measure resistance (ohms). Make sure the battery in the multimeter is good because current is needed for it to measure resistance. Then, you put the multimeter probes on the two sender wires and measure the ohms when the sender is in the full up vs. full down position.
Various outboard makes have differing specs for this, the gauge needs to be matched to this spec, whatever it happens to be for your outboard's sender.
So - it could be that your gauge is mis-matched or that the sender is bad. OR the wiring between the sender and gauge is messed up.
You might check there for your resistance specs.
http://ww2.tflx.com/pdf/trimsy~1.pdf