With the DA or 3W ignitions, you only get spark if the magnet is moving rapidly passed the pickup. The pickup is a coil, not a Hall sensor. A Hall sensor will give a spark at zero rpm.

The timing is set when the dash mark on the hub is aligned with the dash mark on the crankcase. This puts the piston at Top Dead Center. At this point the sensor is moved so that the magnet on the hub is aligned right between the "3" and the "W" stamped on top of the sensor. Before you do this, take a felt pen marker and straight edge, and draw a line through the center of the magnet onto the hub. You then use this line as a reference, since the magnet will be hidden under the sensor.