Electronic – how do i connect a photodiode detecting laser

The simplest way to connect a photodiode (even an LED can be used in this way as a photosensor) is as below:

^{simulate this circuit – Schematic created using CircuitLab}

Note that the photodiode is reverse biased through the 1 Meg resistor R1. The photocurrent generated by the diode opposes the flow of leakage current through this reverse biased diode, said opposition increasing with more light on the diode junction. The voltage at the junction point thus rises in voltage with increase in light.

The schematic on the left will have fairly low voltage at the ADC pin. To increase this voltage, an op amp can be used as a non-inverting amplifier, as shown in the schematic on the right. In the example shown, this gain is Gain = 1 + (R3/R4) = 9.9182.

This voltage gain results in a greater reading at the ADC pin, potentially making use of a greater part of the ADC's input voltage range.

Other applications of op-amps for photodiodes include:

• as a transimpedance amplifier, to directly amplify the photocurrent, without use of a biasing resistor
• as a voltage follower (unity gain buffer) for the voltage divider formed between diode and biasing resistor

Note:
One must ensure, though, that the voltage after amplification does not exceed the 5 Volt supply. If the op-amp is powered from the same 5 Volt supply as the Arduino, this is automatically taken care of, as the op-amp's output gets clipped at its upper supply rail, or even lower if the op-amp is not a rail-to-rail type.

How can I increasy sensitivity of the photodiode

Sensitivity is usually not really a function of the photodiode but of the receiver circuit after the photodiode. One effect of the photodiode itself is that using a smaller photodiode will reduce its capacitance which might allow you to use a more sensitive receiver circuit.

Note: Sensitivity means the smallest signal an optical receiver can detect. Responsivity is photodiode characteristic giving the ratio between the optical input power and electrical output current.

If you meant to ask about responsivity, for a photodiode, it's typically limited to 1 electron produced per photon received, so there is a maximum limit and you'll find many photodiodes approach this limit very closely. If you really need higher responsivity, you can consider using an avalanche photodiode but this requires a high-voltage driver circuit which is much more complex than what you have now.

(and possibly reduce effect of daylight)?

You can add an optical filter in front of the photodiode to pass through your laser wavelength and block other wavelengths.

Another typical trick is to modulate the laser at some frequency (often 40 kHz) and then add an electronic filter after the photodiode to specifically detect those signals. Off the shelf "IR" transmitters and receivers (like for the remote control of your TV) typically include the 40 kHz modulation and demodulation circuits.