Ki

Ki is the natural energy that flows through all living things. However, if the person is skilled enough, then the person can actually utilize Ki for offensive and defensive abilities. If a person is skilled enough to master ki, then the person can predict the opponent's moves or analyze their fighting style. Only 4 individuals have been shown to use ki Sara, Kariya Kagetoki, Shoryu and Mugen.

The easiest way to explain how to use ki is the concepts of fish. When fish swim, they can sense the current. If they sense something is against the current, then the fish will know there's danger, and dart away.

Application
Ki can be used offensively. For example, Shoryu uses ki to augment his sword to deal devastating damage, as well as deal damage to the body without touching them. Shoryu can also use his sword to deal long range damage without even touching them.

Shoryu can also use his sword to make it more heavier, as shown when Shoryu uses his sword to wear down Mugen.

Sara can use ki proficiently, it is implied that she uses Ki to get around her blindness. Ki also seems to augment her physical abilities, as shown when Sara can destroy boulders with just one blow.

Out of all the users, it seems Kariya Kagetoki has the most knowledge in using Ki, as shown when he uses his ki to create huge tidal waves by just dipping his sword in the water, and sensing his opponent's moves.

Kariya is also skilled enough to manipulate his chi to make him more threatening, as well as phase through Mugen.

Finally, Mugen has shown to use ki before, but only once. This is shown when Mugen uses his ki to knock down Shoryu's sword and even left his hands bleeding. However, Mugen hasn't been shown to be using ki that often anymore.

Trivia

 * Although Mugen can use ki, Jin understands Ki better.