In my first save with Watford, I used a 3-4-1-2 formation (I'll list everything later), and so far I have only lost 2 games, and that was against Oxford in the Capital One Cup on penalties, and against Barnsley when there were 3 games in a week. So far, I've won 10, drawn 2 and lost 2. If you need any recommendations for signings, you can get Jason Steele for 3m if you add monthly installments, and I'd sell Manuel Almunia for 150k just to get some additional funds for an aging player. I also signed Lassad Nouioui as a back-up striker but he hasn't done very well for me. It could just be that I haven't played him enough, though, because he has the stats to be a great Championship striker.
Here's the formation...
Goalkeeper - Defend (New signing or Manuel Almunia)
Centre Back - Cover (Gabriele Angella)
Centre Back - Stopper (Joel Ekstrand)
Centre Back - Cover (Essaid Belkalem)
Defensive Winger - Support (Marco Davide Faraoni)
Ball Winning Midfielder - Support (Almen Abdi or Cristian Battocchio)
Deep Lying Playmaker - Support (Alexander Merkel or Daniel Toszer)
Defensive Winger - Support (Daniel Pudil)
Enganche - Attack (Fernando Forestieri)
Deep Lying Forward - Support (Park Chu Young)
Advanced Forward - Attack (Troy Deeney)
What you can do is swap Forestieri for Diakité and play him as an Anchor Man in defensive midfield. Hope this has helped.