Psycho Sword is the second weapon obtained in Soul Blazer. It can paralyze monsters that Blazer doesn't have the way to defeat, like metal and spirit monsters (they require the Zantetsu and Spirit Sword, respectively).
The Psycho Sword can be obtained in GreenWood. In order to get it, the player must first obtain Delicious Seeds. Then, Blazer must give those seeds to a squirrel that he freed. The squirrel will give Blazer the Psycho Sword.
Blazer must be at level 5 to equip this sword. It has a strength stat of 2.