I agree, to my experience, it's better to reduce their defense stat than to reduce their phys resistance with ghost sword as stated above.
Well, ghost sword only good againts ghost type units (ghost, ghost pirate, etc) and if you use physical dmg troops, for cyclops, knights, paladins, i'd rather decrease their defense than using ghost sword, unless you're planning to use the no retaliation set (which is very powerful if you use fast and damaging melee units, like horsemen and unicorn).
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