Incremental the basics

 The principle behind a Incremental position encoder whether linear or aotary is a sign wave or a digital square wave created from a standard with a gradient equally spaced on a standard.   For instance Heidenhain a leading manufacturer of measuring, control and display technologies has a patented Diadur process of Bonding metal to glass in very fine and equally spaced dashed on a piece of glass.   These dashes are spaced at gradients finer than 1 um.  In this instance there is a scanning unit or readerhead for the Unit which has a lightsource that shines through this glass.   where the glass is bonded with metal there is a shadow created.   On the opposing side of the glass there is a series of phocells that finely detect the light to dark transitions.   There are commonly 4 photocells that create the phase shifts of the output signal 0, 90, 180, and 270 degrees.   http://www.ssiquality.com/evalfeedback.htm this link displays the A and B or 0 and 90 degree sine and square wave patterns.     It does not display the A- and B- or 180 and 270 degree wave forms.    These are commonly used as a check so to speak and some processers only actually use the A and B Channels.  This is enough to determine position and Direction.   

Position:  

Position is determined by bringing the encoder to a known postion.  Once it has reached its known position or coordinate then it can monitor the number of wave forms produced based on a fixed length or angle it can determine its position.  This known position is usually a REF channel in or above instance it is a separate photocell on a seperate track than the Incremental track on the glass that triggers a sine or square wave at only at the exact same position every time. 

 

Direction: 

Direction is determined by monitoring the transition of the A and B signal channels. 

This is what the wave form would trigger if i change directions. 

ABABABABABABBABABABABABABA 

As you can see during a change in direction you see a clear transition in the order that your A and B channewls trigger. If the encoder changes direction it will see either the A or the B channel trigger twice in a row.