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If setup correctly, it can be very precise and give feedback telling when the blades have cut deep enough.
Use:
Sight down the blades.
Align the blades with where the wire should be stripped.
Move the wire into the blades having the blades cut into the insulation.
When the blades cut through the insulation and contact the wire the LED will light.
Spin the wire or the tool to cut the insulation completely around the wire.
Remove the wire from the tool and pull off the insulation.
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