So here's how it happened. I'm still fairly new in my fort, with enough wealth to buy out each caravan, and a military large enough to kill a kobold if I'm lucky.
I'd just finished trading, and was going about fortress business, pretty much having already forgotten about the merchants in my trade depot. Then I get the message that a Titan had come. Looking at my meager military, I quickly decided to call all dwarves back into the safety of the fortress, hoping that they could beat the Titan there.
I sat there and watched step by step as the Titan advanced towards my entrance, about to cut off the escape of one of my poor dwarves, when out of nowhere a human merchant comes charging in to the rescue, axe swinging. He's quickly joined by his fellows, and in no time, the ice giant Titan has been shattered into a billion pieces and is now lying on the ground forming little puddles. Turns out humans aren't so bad after all!
This got me thinking, what if I can keep a reserve of merchants at all time to fight off the baddies for me. Why risk the safety of even one dwarf, when I can send out a couple of highly trained merchant guards, and watch the chaos that follows? I've already got a drawbridge at the entrance to my depot anyway, so I don't even need to change anything.
I've heard that merchants go insane after hanging around the fort too long. I can't have psycho elves hanging around, they're bad enough as they are.
What I'm thinking is hold them as long as I can, then release them just before they go insane, hopefully leaving as little time between their release, and the arrival of the next caravan as possible, to give me as much additional human shield (literally) time as possible. Does anyone have any idea how long it takes to send them insane? I'm sure you sick bastards have experience in mentally breaking other races