After the MPG selection done,we will go to setup the the MPG at Mach3 Software.
Go to Mach 3 and Menu -> Config -> Ports & Pins -> Encoder/MPG's as following.
Then to active the MPG function, you can use the hand pulse, under the main page, click TAB to active
MPG panel, refer to the following Picture:
Digital Dream Mach3 Motion Controller
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UC300 User's Manual