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Every time you enter a battle there are a few things you need to take note of. First, be sure that you will be gaining experience and loot by checking to see if you have stamina.
Combat is essentially broken down into two distinct phases, a player phase and a enemy phase. When the battle starts you will see a timer located at the top center of your screen. You have 20 seconds to complete all of your actions. During your first turn you will only be able to give orders to two or three of your characters before the eneyphase begins. The enemy will also have 20 seconds to compete their actions.
During the player phase you can do everything from skipping a members turn to using abilities and items. One of the more unique things about the combat system is that it allows you to move your members positioning. Positioning plays a big part in the strategy side of the game.
There are three rows and three columns for both players and npcs to function in. Basically it is a 3x3 grid that players and mobs can move around in. The reasoning for being able to move around is simple. You can not attack a mob and a mob cannot attack you if you are standing behind another member. Since you start out with 3 mercenaries I will just use a swordsman, a staff and a ranged class for an example.

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You will want a class that can take a hit out in your front row. Any member that is behind a front row member can not be hit, unless it is a ranged or flying unit that is attacking. The same goes for picking your targets to fight. You can not attack a mob that is behind another mob without first killing the mob out in front. The postioning of your members as well as the positioning of your enemies plays a great factor in how you should plan out your strategies.