First you need to find Monster Spawner. I recommend finding two or more spawners close to each other. You can farm with Oil Slime Spawner or Voidling Spawner. I found both of them, but if you can't, I suggest you go for Oil Slime Spawner. Because Oil Slimes drops Oil Clot and thats good for late game and it's the only way to get Oil Clot.

If you want to make farm area you need to do far away from your base. Because if you don't monsters try to reach you and break blocks. And also i suggest you to do farm area below to your base not the same row/line.



Maybe you can find a spawner higher than the other spawner you found, in such a case, if you do it this way, you can gather the mobs to the same point.



If you make a area like me, there may be a problem like this (mobs can try to break the block underneath)


There's two different solution for this problem. First one is the easiest and laziest way, you can just ignore it and stay away from the wall. Second, you can expand the bottom area(mob area)

You can just kill them with sword on the safe area.





Or you can use turrets in the late game for farming.