How to play Knalgans
General Knalgan strategies
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Dwarvish Thunderer: Get 1 or 2. Good against essentially all of the Loyalist units, the Pierce ranged is even better against the 2 mounted units.
Thief: These guys can be used against most Loyalist units at night, but avoid trying to backstab Spearmen. Even at night their firststrike can get nasty on this low HP unit. I recommend the Poacher instead of this guy.
Poacher: A great unit to counter-attack Loyalists and press the attack at night. His multiple strikes are of better use against the high defense Fencer, though his ranged Pierce is best against the mounted units. His attack does a modest 3-4 to Heavy Infantry at night (compared to a Thunderers 11-1), and this unit that you'll want to use against Spearmen outside of day as well. Although they will be weak during day, they serve many purposes and are well worth the 14 gold.
Footpad: Do not recruit this unit when fighting Loyalists.
Gryphon: Useful as scouts mainly, you can use these to run down hurt horses, go for 1-attack-kills on Fencers (9% chance if they have no bonus hp), or again, to try to hold important grassland hexes. Beware during day though, as HI, Mages, and Horsemen can all tear Gryphons apart quickly. Recruit no more than 1.
Recruit a Fighter, a Thunderer, a Guardsman, and a Gryphon depending on the layout of villages. Fill out your army with what you think will serve you best for that particular battle. Water battles will be nearly pointless. Cheap Mermen with higher defense will easily rout your Gryphon(s). Avoid sea battles unless you can taunt a Merman within range of a ranged unit (who can stand on decent terrain). A Gryphon's extra sight is good for spotting long range Horsemen, so it usually is worth having one around, but recruit no more than one. They don't counter any unit very cost-efficiently, so use it primarily as a scout and utility unit.
You'll want to press as hard as you can at night, more so than even against Drakes. The reason for this is that Loyalists have no level 1 Neutral or Chaotic units. Every unit the opposing player has will suffer a penalty at night - unless he has a Lieutenant behind his front line. Because of this possibility, don't press too close to his castle until you have gained a monetary advantage, as you will start losing units more rapidly when he comes back at you with an additional +25%. Put your Guardsman up front - this will dissuade any Charge attackes. Keep a Dwarvish Fighter or Dwarvish Ulfserker nearby in case the player chooses to besiege you with Mages. Spearmen that attack a Guardsman in day will deal nearly equal damage to each other, which can add up quickly. Counter any advance with Thunderers and Poachers. Don't expose your Dwarves to poor terrain or they will die.
You'll want to whittle away at Heavvy Infantry with Poachers and Thunderers and you'll want to give the killing blow to a Fighter. Upgrading Dwarven Fighters should be your #1 priority as they are your best defense and counter to the easy Spearman-wave attack. Once leveled up, the massive HP on the Steelclad will also give it the ability to withstand attacking Heavy Infantry and Mages.
Basically, Loyalists have an incredible amount of versatility. You'll have to play smart and counter-attack very well in order to win. Deal free damage when you can, and limit the number of hexes you can be attacked from - especially during day. Start commencing your attack before night actually breaks. You'll want to maximize your advantage over those 2 turns, so make sure they don't creep away before night hits. As always, stay on good terrain, and make sure Fencers can't skirmish around to kill any weak units you may be hiding.
Knalgans versus Northerners
The biggest problem you will have with Northerners will be their numbers. Northies will gladly trade units with you and gain a monetary advantage. Make them depend on luck by staying on good terrain, and their high upkeep may start to become a factor.
Dwarvish Ulfserker: Recruit one of these guys if you're really having a problem finishing their units off, or your opponent likes to use Assassins. He's expensive, and Northerners are melee oriented, so most of their units will be able to take a majority of this unit's HP away, if not kill him outright. Assassins' Poison will quickly erode your army's HP though, so having one may prove valuable. Since Assassins cost 17 gold you'll only lose 2 in attrition, and you'll likely take lots of hp from another unit with you.
Dwarvish Fighter: Again a necessity. His damage dealt in defense is how you'll deal a majority of your damage. If possible, get a rotation of these guys in the front line. You'll deal more damage than your opponent on average, but he will come with more units - 4 Grunts cost the same as 3 DFs.
Dwarvish Guardsman: Another good guys to have one of if not more. He can survive nighttime assaults better than the fighter, and will still do respectable damage back to the enemy. Use your ranged attack on Grunts to make them turn around and heal.
Dwarvish Thunderer: Nice to have. Their combination of good resistances and ranged damage make them good counter-attackers. For cheaper ranged counter-attackers, use Poachers as they will also be used to hold forest hexes. Recruiting DTs may crowd your hill hexes, especially since that's what the Northies will be grabbing.
Thief: Not a great buy against Northies. His melee-only nature along with his Chaotic alignment make him most effective in the same way Northeners are. Avoid the urge to recruit these guys.
Poacher: Again, these guys you'll want to recruit a few of. When the Northies come after you at night, you can make a strong counter-attack with their 5-4 ranged.
Footpad: This guy can be a utility unit against Northerners, but the money is better spent elsewhere. Footpads can harass Grunts and Wolfs, take forest hexes, and block Assassins from poisoning your Dwarves. Not the best buy, but you may be able to get your money's worth.
Gryphon: Again, it's usually good to have one of these guys to scout, plug up grassland, and be a defensive damage dealer. He's also good for trapping/killing Assassins and being a target for their poison.
The biggest thing you need to worry about will be Poison. If you get a good foothold on mountains and hills, Poison will be the weapon of choice to knock you off your perch. Be ready to fill in with a replacement unit, and try to kill assassins before any other units. Melee strikes will have to get through your resistance - poison does not. You also don't deal any damage back when poison hits you.
Recruit a Dwarvish Fighter and a mix of other good units. Stay on towns or mountains for the first assault to minimize the effect any poison will have and reduce the chance of it hitting. Let your opponent attack you, and then counter-attack with your Poachers and Thunderers if you have them - even Guardsmens' ranged attacks will add up. Send Ulfserkers against Assassins whenever you get a decent chance, as the Poison will hurt more than their melee attacks.
Allow your opponent to attack you from forest hexes if they are next to mountains that you occupy. Your 70% defense will outdo his 50% defense, and his confidence will be higher to attack since he won't be on grass. Even if an Assassin uses that hex, if an Ulfserker is within reach, he should be able to take him out from on top the mountain.
To kill Trolls, you will want to focus exclusively on them until they die. Thus it is best to ignore them and kill others than to only do a minimal amount of damage to Trolls each turn. Their regeneration will give them essentially limitless HP if you do this. Kill his friends and then focus on him. If there are several, take them out one at a time. Try to avoid water battles with Nagas, unless there is only one. You won't want any Gryphons you get to be zone-locked, especially where you cannot help them, so be cautious with water battles.
To sum up, kill poisoners fast, get units that deal good melee damage in defense, and get good counter-attacking ranged units