It seems that many people here are experiencing problems with auto targeting, so I've decided to write a mini-tutorial on this topic.
1. Here's the target (Liberty Cargo), approximate distance - 5150 m.
2. Dive to periscope depth, raise the attack periscope.
3. Lock the target (press Space) and identify it (optional).
4. Set the torpedo speed, depth and pistol.
Make sure the TDC is OFF.
5.
Unlock the target (press Space). Notice the trajectory of torpedo changes automatically to intercept the ship. Move periscope crosshair and choose place where you want to hit the target. Fire tube one.
6. Aim the second torpedo (optional). Fire tube two.
7. Let's see how our torpedoes are traveling through the external camera.
8. First torpedo impact (ship increased speed and started an evasive maneuver, but it was too late for him).
9. Second torpedo impact.
10. The ship is sinking.
11. It's done! We've managed to hit a ship from a large distance (~5000 m) using automatic targeting, without connecting any dots.
Enjoy.