I'm no expert, but the trading system boils down to four things, Trade Nodes, Trade Value, Trade Power and Merchants. I won't talk about modifiers here because there are a billion different kinds of Trade modifiers influencing every little thing and there's no point in keeping track of all of it.
A Trade Node is a region of provinces, like a cultural region or a colonial region, only it never changes throughout the game. A node does not belong to any single province, even though the trade filter makes it look like that. Nodes are connected via directional paths indicating which way trade is flowing through the world. Trade flows from "upstream" nodes toward "downstream" nodes, as would water down a river.
A node's Trade Value is the amount of ducats inside that node, and is determined by the Trade Value of all the provinces within the node (Local value), and the Trade being directed towards it from upstream nodes (Incoming value). Trade Value for a province is calculated from the production of a good (like Naval Supplies, Wheat, Slaves, etc) times the price of that good on the global market + modifiers from the owner country.
Note that gold producing provinces provide no Trade Value whatsoever. That gold is converted directly into ducats for the owning country. They're extremely valuable, but exist entirely outside the trade system.
A country's Trade Power in a node is determined by how many provinces they own in that node, their Light Ships protecting trade in that node, and their Merchants present in that node. Trade Power is how much influence a country has on a node, and is relative between all countries with any Trade Power in that node. So if Country A has 900 Trade Power in Antwerpen, and Country B has 100 Trade Power in Antwerpen, Country A will have 90% of the Trade Power there, vs Country B's 10%.
Trade Power is the number most subject to player manipulation. With Trade Power and a Merchant in a node, you can do one of two things.
Collect from Trade: Collecting will give you a part of the value that exists in the node proportional to the amount of power you have in that node. You automatically collect from your Main Node, which is the node in which your country's Trading Port resides. By default, this is the same as your Capital. But after 1.6, Paradox gave us the ability to change it without changing our Capital. When you put a Merchant in your Main Node on top of the default collection, you merely increase income from that node by 10%. When you collect from any other node, however, you take a 50% penalty. Example:
- The Venice Trade Node has a value of 20 ducats.
- Venice has 75% of the Trade Power in the Venice Trade Node.
- Milan has 25% of the Trade Power in the Venice Trade Node.
- Both Venice and Milan are Collecting from the Venice Trade Node.
- Before income modifiers, Venice will gain 15 ducats per month and Milan will gain 5 ducats per month.
Transfer Trade Power (aka "Steering"): Steering using a merchant will allow you to direct a portion of all the existing trade in that node towards a downstream node of your choice. In the Trade filter, these are the arrows and checkmarks you see on some nodes. Ticking one of the routes means "direct trade towards the next node in this path". If you have any Trade Power at all in a node, you will automatically force some trade downstream, but it will be divided evenly among all trade paths that lead toward your nodes. To actually steer it down a particular path, you need to send a Merchant to it. Steering benefits from Trade Power just like Collecting.
- The London Trade Node has a value of 10 ducats.
- Britain et al. has 60% of the Trade Power in the London Trade Node.
- Burgundy has 40% of the Trade Power in the London Trade Node.
- Britain et al. are all Collecting from the London Trade Node.
- Burgundy is steering trade towards Antwerpen.
- Before income modifiers, Britain et al. will gain 6 ducats per month.
- Burgundy will send 4 ducats downstream (as Outgoing value) towards Antwerpen.
How do you determine what is the best way to steer trade and divide up your Light Ship fleet? Well, it's simply a matter of solving a multivariable equation. If you're good at math, I'm sure you could calculate the absolute maximum amount of Trade Income you can achieve at any given time. For the rest of us, however, this is not an easy task, so here's how I do it:
The first thing you should focus on is getting high Trade Power in your Main Node. In the early game, this is most easily achieved with a large fleet of Light Ships. Most Light Ships will pay for their own maintenance unless the node you're in is very poor. You can also build Trade buildings in your provinces, but, generally, these aren't very efficient except on extremely trade-rich nodes. Some provinces have modifiers called "Trade Estuary" or "Important Trading Center", and these will give the province a massive boost in trade power. It may be worth it to build some trade buildings there, but in general trade buildings are the weakest of the lot. The only exception to this are landlocked nodes, which cannot be influenced by Light Ships at all. So trade buildings are the only other way to increase your power in a node without conquest/diplomacy.
After a few decades of conquest and when you've taken over more provinces in your Main Node, you can afford to send a part of your fleet upstream to direct more trade towards your home node. I determine when it's a good time to do this by splitting my trading fleet in half, with one half protecting trade in my Main Node, and one half protecting trade in an upstream node where I have a Merchant steering trade. If I see my trade income go up, then I'll keep the current configuration. If not, I'll merge the two fleets again and wait for more conquests. You can see details on your trading in the Trade tab, and your income as a pie chart. Mouse over it to see the projected income for the next month.
Once a century or two pass by and I have almost all the provinces in my Main Node, this is where the real trading game begins. I find the path that cuts through as many rich nodes as possible, focusing on ones where I already have conquests or colonies. Then I station a Merchant in each of those nodes, forming a chain from my Main Node to some far off overseas node. Wherever I can choke off trade from some rival countries, I will send a fleet of Light Ships there. Every Merchant steering in a node will boost the value of all trade being directed through that path. It benefits you more to have them all in a chain formation rather than, say, a star formation.
As you acquire Merchants and increase your Naval force limit, you should experiment with your Light Ship/Merchant configuration as I described above to maximize your trade profits. I tend to work in binary, splitting my fleets in half for each separate node I want to control and then shuffling them around to find a good, if less-than-optimal configuration.
Why not still focus on my Main Node? It's because Light Ships don't actually produce money in a node, they just give you more access to money that's already there. Say I have 90% Trade Power in my Main Node. With my entire fleet protecting trade there, I can go up to 99%. This will only give me a 10% boost to income. However, if I direct more trade towards that node, I can potentially get far more than a 10% income boost, especially if I have rivals upstream who are cutting off the value being sent downstream with their own trading fleet.
In the last MP game, Kab and I had almost total control over the Gulf of Lawrence and Chesapeake Bay nodes. However, because Portugal has some massive steering bonuses, 10 ducats were still being directed from Chesapeake Bay towards Sevilla. Chesapeake Bay was also Kab's Main Node. If I directed more trade towards Gulf of Lawrence, I would be eating into his profits. Therefore, I asked him to move his Trading Port to Gulf of Lawrence, and then I sent a fleet of 10 Light Ships to Chesapeake Bay to reduce the value Portugal was steering away to 4 ducats resulting in 6 more ducats that were shared between me and Kabouter.
