Your sword is set to correspond with the movements of your mouse. It will follow the horizontal and vertical movements, as well as rotating in relation to the position of the mouse.
Blocking:In order to block all you must do is line up the red target on your sword with a red target on the screen. You cannot block while attacking.
Attacking :You attack in much the same way as you block, except this time the target is green. Position the aiming area of the sword over a green target, and click and hold the left mouse button. Remember, red targets are for blocking, green targets are for attacking.
Always remember to hold down the mouse to fully swing. If you click too quickly it wont register the hit.