Don't  know if this is the place to post this  or if this is even possible but here it goes
So I am trying to see if I can set the X and Z in some kind of joystick so I can move on my lathe  and also it is recording every move.
Can this be done with Mach

Yes you can do that.
 May consider using an XBOX 360 ( there is a plug in available ) and use it with CopyCat to actually generate code.
There is a manual for CopyCat in Members Doc's.

One can  create a custom screen set and scripting  for obtaining points via probing or touch off so the points  can be manipulated for latter use or actually drawing the points as points/line/arcs  directly into CAD or creating a DXF file.

Don't use either much but are handy when needed.

RICH