As adjectives the difference between psycho and bully
is that
psycho is (colloquial|or|pejorative) psychotic, or otherwise insane while
bully is (us|slang) very good; excellent.
As nouns the difference between psycho and bully
is that
psycho is (pejorative|slang) a person who is psychotic or otherwise insane while
bully is a person who is cruel to others, especially those who are weaker or have less power.
As a verb bully is
to intimidate (someone) as a bully.
As an interjection bully is
(often|followed by for) well done!.