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The detector tracks the series of light exposures it receives and sends that information to the processor that extracts motion information. Light passes from A and B channels through a disc onto the photovoltaic or photodiode array. The disc rotation creates a light-dark pattern through the clear and opaque disc segments. Its then fed into a processor that can process the signal to determine the number of pulses, direction, speed, and other information.

Incremental encoders can also have a third channel with a single segment slot or reference that is used to zero or home the device.