If a joystick is sticking in one direction, you have trouble hitting diagonals, or you would just like to make your joystick more sensitive to movements for a fighting game, adjusting the microswitch sensitivity is your answer.
A good way to test if a microswitch direction is sticking because it needs adjusted is to open our X-Arcade Test Program and move the joystick in the direction that it sticks in, and as slowly as possible let it go back to center position. If it sticks, it needs adjusted.
The metal arms on the microswitches can be adjusted toward the center for more sensitivity, or away for less. The best way to do this is to hold the microswitch closed, and bend just the part of the arm that is past the microswitch slightly. This is quite a sensitive adjustment, so only bend it a little bit and then try it. Adjust it more if needed.