how does this skill work,i did not really notice a difference during fighting.

Stand there and not auto. It should have a quick light brownish wave animation expanding out from you doing dmg

so its some kind of retaliation attack?

Yes, it is a retaliation skill. Monsters need to hit you in order for the skill to activate.

is it worth putting some points into it? or only if you max it?

Either go for it if you plan to max it or don’t bother with it… also, you might wanna go Commando or Battlemage and use Vindictive Flame or Mirror of Ereoctes to combo with it, although I prever Vindictive Flame the most.