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To damage Psyamon, you will have to use your Power Bolt attack. Just shooting him with your miniguns will not effect him. Psyamon will shoot a red ball of energy at you. If it hits you, it will do a significant amount of damage. To avoid it, shoot at it with your miniguns to blow it up. He will then open his mouth and release Wraith Ranx (ghost-type Ranxs) at you. Shoot at them as fast as you can, as he will release a lot of them. When you kill one of them, your Power Bolt gauge (the gauge at the bottom right corner of the screen) will rise. When the gauge is full, you will be able to shoot your Power Bolts at Psyamon. As the battle continues, Psyamon will get much tougher. For example, after you damage him once, he will also shoot a blue ball of energy at you. If it hits you, your robot suit will malfunction, causing your movement to fail. To avoid it, shoot at it. He will also release more Wraith Ranx at you. Repeat the process five times to kill Psyamon.