Hello 

I've had an Optimum D280x700 Vario CNC lathe for some time now and have been controlling it with Mach3 just fine.
Now I have to make a new draw bolt for my mill and for that I need to make a BSW thread.
So I went and bought the Encoder kit from Optimum and got the parts with absolutely no documentation.
I figured out the mechanics but now I'm stuck on the electronics.
The Encoder is Chinese OIS708-1024/Z3-5LD  and has 8 wires marked V+ 0V A A B B Z Z
Is there any way I can get this into Mach3 so I can make threads?
I'm not even sure modbus is the correct answer 

Kind regards,
Jens

Modbus isn't the answer.

A far simpler type of encoder would of done the job, as mach only needs (can only use) a single pulse per revolution for threading, but what you've got can be made to work, as it does have an index pulse.
You need to supply voltage and a gnd to the sensor (you'll need to check the datasheet for the recommended voltage), then connect the Z wire to a spare input on whatever breakout board/interface your lathe uses. Then set that up the relevant pin in Mach to recognise the spindle index signal.

Thanks! I added another breakout board on another port and attached the encoder to it.
Now when I start the lathe nothing happens until I set the spindle speed ex. S300.
Then STrue displays 300 for a second and then over a second or so goes down to 0.
In the mean time the lathe's display shows 126

That could be one of many issues. I'd suggest posting in the General discussion board so more people see the post.

However, first you need to check that the BOB is actually seeing the signal from the encoder, this is done by using a multimeter to make sure the signal at the BOB switches as the spindle is slowly rotated past the index position.

However, it could be that the encoder you've used may not provide a long enough index signal to be detected by a parallel port.