clock sensor Potentiometer with Continuous Rotation

Hi there – I want to make a clock, with a face that goes round the hands, something like this
and was wondering if it order to set the right time it possible, to use a Potentiometer with Continuous Rotation or a rotary encoder, which wpuld send a signal to tell the Arduino what the position is, when power is turned off, so it could then adjust the display to tell the right time.

Any Ideas ?

Many watches and clocks move the hands to the 12 o'clock location after a power down or battery change. The reason is, that it is easier/simpler/cheaper to detect a single position than all possible positions.

The exact way on how you can detect the hands of your clock depends on the mechanical system. A simple light barrier with a hole in a gear or wheel for instance could be a good choice. There are plenty of other solutions to detect a fixed position (micro switch, magnetic sensor, ...)