A method for detection of passing magnetic articles which includes an initial step of sensing an ambient magnetic field and generating a voltage, Vsig, proportional to the magnetic field. A threshold voltage is generated as a percentage of the peak-to-peak voltage of Vsig. The method further includes the step of generating a proximity detector output voltage that becomes one binary level when Vsig rises to exceed the threshold voltage and another binary level when Vsig falls to below the threshold voltage. The threshold voltage is periodically updated to remain the percentage, within a predetermined tolerance, of the peak-to-peak voltage of Vsig in response to changes that may occur in the peak voltages of Vsig. In one embodiment, the threshold voltage is at a first level corresponding to a first percentage of the peak-to-peak voltage of Vsig when Vsig exceeds the threshold voltage and is at a second level corresponding to a second percentage of the peak-to-peak voltage of Vsig when Vsig is less than the threshold voltage.