How to correctly read values from wheel encoder using arduino

[SuperMiguel]

So im trying to read the values from my encoder using an arduino mega.. This is the encoder i got:

The motors i have are these: http://www.specamotor.com/en/Faulhaber/motors/2342-012CR/datasheet_motor.html

[RobotMan_24]

Hey Super:

I don't see any encoder info up there - looks like you forgot to post it?  In terms of the motor - it looks like the manufacturer has a lot of data - which is always a good sign.

You might want to read this introductory info about encoders here:
http://www.robotappstore.com/Robopedia/Rotary-Encoder

It goes over how some rotary encoders work - which could help you out.  Generally, most quadrature encoders have two channels (A and B).  You could either poll the pins, or better (if you have the option) I would recommend using interrupts tied to your pin state change.  A brief blurb about interrupts can be read here:
http://www.robotappstore.com/Robopedia/Interrupt

Hope this helps, and if you have any questions feel free to let me know!
Robotman_24