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Inventory - Add excess to the trading post (TP) ready for the traders coming through.
Trade - When traders come, and there are different types, trade what they bring for what you have in excess.
Purchase - Select items you want traders (that trade the items) to bring. Prioritise.
Orders - When a trader arrives you can ask him to bring the things he sells every time he comes.
....
With orders, trader will take from your inventory what he wants. Use with caution. It is also more expensive.
Also, when you trade remember your traders will trade what is at the trading post and then RESTOCK from your town supplies. So, if you're trading 200 firewood, make sure you have at least 200 firewood ALSO in your supplies or the trader will take it all.
Hope this helps a little.
When the merchant boat arrives, you sell the goods stored in the Trading Post in exchange for items you wanna buy from the merchant boat.
I usually sell firewood cause its easy to make, trees grows back. Firewood sells at 4 per unit. sometimes 3, depending on the merchant.
So i usually, set 2000 or more firewood to be stored at the trading post.
You can view this if you would like to know something about trading or the game in general: http://youtu.be/cNUOEO27igE
P.S. Before the merchant reaches your dock (when you see him near the docks) - hit pause, save the game, resume the game, if the merchant that showed up is not what you were expecting, re-load the game cause everytime you load the game, a different merchant will be appearing at your dock.
A little cheat there, i would advise you not to do this till you're absoutely done with the game or bored as this reduces the challenge and fun.