When I first started with EU I last summer, I used auto send merchants. This was good because there were far enough parameters to keep in mind anyway. However, I soon discovered that the AI were very fond of sending merchants (one at a time) to my own CoT, just to kick someone else’s merchant out of business. There were 0 or 1 merchant in a few other CoT’s.
After this I decided to handle the trade strategy myself. Have a few merchants in as many European CoT’s as possible (before you discover colonial ones). Send 2 or 3 at a time (one competing and one expanding). Go after Venice the first 2 months of the game, then don’t bother (the competition is enormous even after Thrace get its CoT and the value is down to $150). Don’t sign and treaties, they stops you from expanding your trade since there are always new countries that establishes themselves in the CoT).

If playing a big nation, for some reason your merchants are far more successful if:
Pause the game when the merchants are sent, then don’t pause again before they establish themselves one month later. Move one army unit between 2 of you own territories (must start after resuming and must arrive before the merchants) and click on ‘go to’. When playing a minor (I don’t have that much experience of that) the pause and then don’t pause again seems to have an effect as well as scrolling around the known world.
It sounds weird but after +20 hours a week for 9 months (of which 2 months with EUII) (no, I don’t have a life it seems

), it works for all the countries I’ve played (Portugal, England, France, Spain, Castille, Cyprus, Burgundy) except for Bretagne (it was almost hopeless to establish no matter what and in the rare occasions when I was successful, the merchant was usually kicked out within 3 months).
Has anyone else experienced this?