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Does it matter how far from the hub the magnet and sensor are placed? Doesn't that distance effect the speed reading?

No, the speed reading is independent of magnet position on the wheel.  The sensor does not register how fast the magnet is going by; it only counts the revolutions the wheel makes over a given period of time.  Using that information combined with the wheel circumference it can accurately calculate the speed you are traveling. 

 

When using wireless computers the sensor should be positioned half way or higher up the fork leg to shorten the transmission distance and the magnet should be placed on the spoke accordingly.

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