Abstract: Input data from an XY encoder stage is continuously monitored and compared to an internally generated count as the stage is adjusted in position. The internal count is generated a single count at a time by transitions in the X-Y input data on the basis that each transition is a one-step change in encoder position. A series of one-step transitions causes both the input data and the internal count to change together, or track. If a single transition is greater than a single encoder step, the input data advances ahead of the internal count and tracking is lost, causing a comparison error. The error halts the monitoring process, activates an alarm, and holds the current input data and internal count for visual comparison in a numerical display. The operator can then remonitor the faulty portion of the stage encoder to determine the nature of the error.