I've moved my merchant from Constantinople to Wien which seems to give me the most money. But I still don't understand why I need a merchant in Ragusa to steer towards Venice but not in Constantinople.
Merchants do 3 things:
1. Add 2 trade power (or more, when steering to or from an inland node)
2. Allows to pick in which direction the steered trade value goes
3. Increases the steered value by some percentage
Without a merchant in Ragusa:
1. Your trade power there will continue to contribute to what percentage of the value gets steered out of the node as normal,
but
2. Other nations with a merchant that is steering get determine
where the steered trade actually heads to; in Ragusa that will usually be towards Wien
Sidenote: Ragusa is a rather horrific node when you don't dominate the Wien node, because nations in Germany and Hungary all get their caravan bonus, whereas you need to throw light ships to match the caravan power that gets added for each nation with a merchant that is steering somewhere else.
edit: s/nation/merchant/