An inductive sensor senses disruption of it's magnetic field, whereas a magnetic sensor senses the presence of a magnetic field, so the first can only sense when the hydraulic cylinder moves into a given position, but not if it's already in that position.
If it's limit switch application, then a magnetic sensor is what's required, and what you're describing sounds like a hall effect sensor - you could also use something like a reed switch which would close when the magnet is nearby, and open when it's not, but that would be a two wire device, not three.