Fire them at the target.
So you feel like this, do you?
Seriously, look at the Skipper's Bag of Tricks sticky thread for various techniques. Learn the O'Kane technique as it is fast and easy. That will get you in the water, so to speak.
To understand the theory of manual targeting, read Hitman's tutorial on Maual Targeting at 100% Realism. It is a PDF. Print and play through some missions until you undertand it. This where I started, and I knew nothing about the subject when I began.
If you want to pracitice any attack techniques, including the above, download and activate via JGSME Rockin Robbins' Dick O'Kane practice mission. You practice sinking a tanker in the waters of southern California. The mission can be replayed as many times as you want as you practice.
Hitman's tutorial will help you understand the concept of a target's aspect ratio (it's profile to your boat, which affect the determination of its length as observed through the periscope, and Aob.) You will need to perform some basic math calculations as you work through the tutorial, but once the concept sinks that step will not be required. Also, download and activate the Easy Aob mod from Neal Steven's Popular Mods sticky thread in the mods forum. You will need it later.
Tackling manual targeting seems like a daunting task at first, but once you hit a target it will begin to make sense. Learning this is not a ten minute task. You will spend several hours on the learning curve, and the rest of your career perfecting it and gettng the desired mod set up.
Another basic attack is the constant bearing technique discussed in RocknShoals thread in the Skipper's Bag of Tricks sticky.
Auto targeting - cannot help you on that one, except to say that when the target triangle is green you are good to go.
Come back, tell us how you are doing, and bring cigars when you are ready to announce you are battle ready.