Biking VR sensor

Hi guys! I'm new to this community.
I was inspired by this guyhttps://pauldyan.wordpress.com/2016/01/24/my-vr-bike/
who made a biking vr with arduino.
I'm making exact the same thing on my own. But instead of using light sensor. I want to use rotary encoder. I've tried mechanical one. The result are pretty disappointed. It's not accurate at all. And after that I've search for rotary encoder which can fit my request. I find out capacitive rotary encoder is very precise even in a high speed rotation.
Can anyone give me some suggestion about which rotary encoder is best for my option?
Which needs to work with Arduino UNO~

Thank you in advance!

Honestly...the original sensor was an elegant way to do it. You dont have to worry too much about how to attach it etc. Rotary encoding is a step backwards.

I want to use rotary encoder.

This type of application is typically done with magnets mounted on the wheel and a hall sensor. If you want more than one pulse per revolution, use more magnets spaced around the wheel.