Dagu encoders are composed of two parts for each wheel. A magnetic disk with eight poles: four north poles and four south poles and a Hall effect sensor. The magnet disk is placed in a shaft of a wheel and the Hall effect must face it at a maximum distance of 3 mm.
Once you have placed the encoder on the wheel, you can connect it to the Arduino. The Hall effect sensor is directly soldered to three wires: black, ground, and white.
The black wire is the ground of the sensor and must be connected to Arduino ground; the red one is for power supply and ...