That's about how it looks according to the Trade reference section in the EU3 wiki.
Unless you put a National Idea into it and work aggressively at moving the Mercantilism slider toward Free Trade, I've never had much luck with keeping traders in CoTs after the first couple of years. They work fine for 1-3 years, and then suddenly they're all driven out and gone in a matter of days or weeks. Hungary ends up falling behind in techs, and once the Merchant Republics start pouring research points and National Ideas into Trade, the cost of replacing traders far exceeds the income they bring in. If you automate merchant placement, it can easily bankrupt you. Generally, I end up first building Constables for the tax income, and then Churches to reduce the inevitable cost of recovering Stability, which you will need to do a ridiculous amount of if/when you Westernize. After that, Workshops will further boost tax income, and basic ports in your coastal cities improve local production income slightly.
If you can get into the HRE (there are a couple of ways), the shared research points and small bonuses to member states will help speed up your own research, and you'll at least fall behind at a slower rate. Ultimately, you've got to Westernize in order to compete, which will take numerous slider moves (over the course of a century or longer) for both Centralization and Innovation (making Stability really expensive). After that, Hungary can become a competitive trader.
The alternative is to conquer a Center of Trade (hint: Venice isn't an HRE member), and keep the Trade slider fully to the left (Mercantilism) to significantly increase your domestic compete chance, but that will also make it next to impossible to compete outside your own CoTs.
But that would of course be late in the game.