First I would suggest that you go back to auto targeting till you understand how torpedos work.
For the most part you do not want to shoot straight out the front of the boat. Torpedos have a gyro to steer them to the target. They are supposed to turn. The course they takes is set up by the TDC (torpedo data computer)
the data from the TDC is than feed to the PK (position keeper) This updates the torpedo as to where it goes.
The TDC is the set of dials on the upper right in the periscope view.
The PK is on the upper left.
With auto targeting this is all done for you, you just point the periscope at the target and shoot when you get the little green arrow.
With manual targeting you must enter all data yourself into the TDC and than sent it to the PK
This data is target speed, AoB (angle on the bow), bearing and range.
It can be very complicated at first, that is why I suggest you stick with auto targeting for a time. Enjoy the game in normal mode and study up on manual targeting at your own pace.
Rockin Robbins has some very good tutorials posted at this link:
http://www.subsim.com/radioroom/showthread.php?t=146795
This link has a lot of good information for all kinds of stuff.
Magic