FLOODED STRAND WILL BE MODERN LEGAL SOON
MAINBOARD
Lord of Atlantis - This card is a must if you are playing merfolk, as it gives all your merfolk +1/+1 and islandwalk.
Master of the Pearl Trident - This card is essentially another Lord of Atlantis .
Kira, Great Glass-Spinner - This card will protect your merfolk from removal.
Master of Waves - Between Master of the Pearl Trident , Lord of Atlantis ,and Coralhelm Commander , a lot of devotion is generated and he has protection from red, making it more difficult to kill him with lightning bolt and other burn spells.
Thassa, God of the Sea - Sort of like Master of Waves , but will help get your merfolk in for more damage by making them unblockable.
Silvergill Adept - Card draw, and you should have merfolk to show from your hand.
Phantasmal Image - Copying anything is extremely powerful.
Tidebinder Mage - Just in case you need to tap down a goyf or large green/red creatures (suggested by Reddit).
Coralhelm Commander - Just a big flier, eventually, that adds more devotion for Master of Waves and Thassa, God of the Sea , also it buffs your merfolk.
Merrow Reejerey - Buffs your merfolk, and has a little bit of a control aspect.
Mutavault - Has all creature types, buffed by a lot of things in your deck.
Tectonic Edge - Gets rid of dual lands that benefit your opponent.
Path to Exile - Gets rid of threats.
Spell Pierce - Counters removal.
Vapor Snag - Can bounce your merfolk that are being targeted by removal, or temporarily takes care of a threat.
Aether Vial - Allows you to put merfolk on the battlefield early due to the low mana cost of merfolk.
Spreading Seas - Makes Lord of Atlantis and Master of the Pearl Trident more valuable (Suggested by Tonxen1993).
Flooded Strand - Allows you to fetch hallowed fountains and islands (in case of blood moon or whatever).
Cavern of Souls - Uncounterable merfolk + any mana for merfolk = profit
SIDEBOARD
Angel's Grace - To be sided in against aggro and combo decks.
Mana Leak - For combo decks, or when you need a little more control.
Meddling Mage
- Good against combo decks and denying potential threats.
Rule of Law - More combo breakers.
Spell Pierce - Same as Mana Leak .
Spellskite - Protects merfolk.
Threads of Disloyalty - In case you need to take something small.
Torpor Orb - More combo protection.