I am new to encoders in general and I am thinking about using a magnetic encoder in a personal project were I will need to make my own servo, and thus get an absolute position reading (instead of the relative reading provided by an optica encoder) from the magnetic encoder.
Are there any pitfalls one should know? 
How should I know how many resolution (in degrees) a sensor may have? Is it just about its bits output or there are more hidden problems, like the magnet's properties?

(I know people usually ask for help in this site, and general questions get voted down, but I honestly think this is very helpful so people may avoid wasting time and money in ideas they didnt have the proper knowledge to pursue)