The best method by far is just get a small pulley and let the wire run over the pulley creating tension on the pulley mount. If the pulley is mounted with a plunger in a solid block with a spring, the tension of the wire on the pulley pulls downward pulling the plunger (or pin if you want to call it that) downward in the smooth sleeve in the block which has it's own solid mount via an L-shaped arm. The downward tension on the pulley , can be used to depress a microswitch until the wire runs out and the tension disappears and the switch opens. Alternately some other kind of sensor could be used to take advantage of the tension on the pulley. An inductive proximity switch would work to sense the pin position if the pin was steel and not aluminum. I don't think they respond to aluminum.If for example the pin could only move in front of the proximity sensor with downward tension or otherwise the spring would pull the pin up out of range of the proximity sensor. An inductive sensor will only work when the part to be sensed is totally captive and has no where to go other than up or down in a precision machined sleeve that guarantees the distance from the sensor to the pin is 1 to 2 mm and not more. (the sensor is 90 degree to the pin or perpendicular to the pin with the position adjusted with the threaded nuts on the sensor that allow you to move it forward (closer to the target object) or backward (further from the target object). It mounts in an 1/8" L bracket with a hole in it with nuts on both sides of the bracket.