The crown of the wise is their riches: but the foolishness of fools is folly.
— Proverbs 14:24
Basic light ship, best used for taking out unarmed targets and patrol duty.
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Merchantmen are the maritime equivalent of Tradesmen. Unlike Tradesmen, Merchantmen can't be created — they are created whenever a Tradesman enters an ocean, and convert back to being a Tradesman once they reach dry land. Because they are slow and highly vulnerable to attack by ships, particularly light vessels, any area with high trade traffic must be policed by a fleet of ships to prevent raiding. On the other hand, raiding may prove to be lucrative if you can use light ships to intercept your opponents' Merchantmen, thus depriving him of a means of generating Wealth on water maps. Units such as the Arab Fusta and Baghlah Hrbiyah can be used to great effect here, as they are not only faster than any ship in the game, but also generate additional Wealth whenever they down their prey.
If you are playing as the Portuguese, then trade can be lucrative, as you are able to construct Trade Caravels. These are smaller caravel-type vessels (compared to the Caravela Redonda which is a larger warship), and are considerably speedier and hardier vessels, making them much harder to intercept. The added speed also confers better results from inter-city trade for the Portuguese on water maps, thus making them the premier faction to be used on water maps.