Following the correct sequence of steps is essential if you want to set up a rear derailleur correctly. Otherwise, it can be a frustrating experience. The entire job can be time consuming, as you'll have to re-fit the gear cable and remove and replace the chain. However don't be put off, none of the steps are particularly difficult to accomplish.
This is a long guide, so you can choose to either watch the entire video above, or follow it in smaller chunks by clicking on the individual steps below.
Steps to Fit And Set Up A Rear Derailleur:
On a derailleur gear system the chain shifts between cog wheels of different sizes. The system adapts to the demands for different amounts of chain with a spring-loaded arm that moves the bottom jockey wheel backwards to increase or decrease the path the chain must follow.
Any single-speed or standard derailer chain can be connected with chain tool. Narrow 9, 10 or '11 speed' chains have plates that are too thin to make this a reliable process and connect with special links that are supplied with them. Some chains – for example Shimano - have to be broken and reconnected with a special pin. Others with a trick link that can be dismantled by hand.
A friction rear derailer is set-up once the limit screws are set and the cable connected. An indexed system, where the shifters click between gear positions needs to be tuned or indexed. the process of indexing is getting the hand control and the derailleur mechanism in tune with each other. Connect the cable with the derailleur in top gear, give the shifter one click. If this makes the derailleur shift one gear the cable was tight enough. If it doesn't make the derailleur shift adjust the cable until the derailleur is in a position that matches the position selected by the shifter.