which Joystick do you use?

Panasonic Power Pad!

I have two of these ones rewired for msx, originally these are analog but the same mechanism works as digital. One thing, is the best practice to lock with some glue those analog-center-adjusts.

yup, keyboard on the real thing.
Unfortunately, when emulating most PC keyboards seem to have trouble with combinations like UP+LEFT+SPACE so playing nemesis in emulation kinda sucks.

Modded DX pad

official sega megadrive 6 button pad with joymega adapter by roadfighter

This plays fantastic!, i'd say its the perfect joypad cept it misses real shoulder buttons (although it has a mode button on the right shoulder).. (with shoulders it would basically be a sega saturn joypad (japanese version) , which is regarded by many as the best joypad of all time)

I also got a few Rhino Pad by Rhino Gear /Ascii, which play decent as well, but the dpad is not as good as the official sega imho, but gets the job done.

Hoping to run into a new or decent condition official sega 6 button pad sometimes.