Updated after the Red Dead Online update May 28.
A combat guide was requested so I'm gonna try to explain the reasons behind my aim settings and give my two cents on the different weapons since I dabble quite a bit with virtual guns. It has to be said that I'm still not sure about a lot of the settings so I mess around with them quite a bit to see what works, and what works for me might not work for you. With that said, below is how they look at the moment. Also, feel free to post your thoughts, tips & tricks in this thread.
Lock-On Mode (On-Foot and Mount/Vehicle): Both are set to wide. Only started using it the other day after DC's shout and have yet to notice any difference compared to normal, but in theory it should allow you to lock onto enemies faster as you don't have to turn all the way to face them directly. Downside can be that instead of targeting the enemy in front of you, it will target another enemy in the peripheral which wasn't an uncommon problem in GTAO.
Aim-assist (On-Foot): Not quite sure about this one. During story mode I turned it all the way down when trying out free aim to build up muscle memory, and I forgot all about it until yesterday when I turned it back up (which is default if I'm not mistaken). I felt like it helped but it's hard to tell tbh. Definitely didn't hurt so I'll leave it maxed out.
Aim-assist (Mount/Vehicle): This should without a doubt be set to max.
Look Sensitivity: It can be turned up quite a bit without overshooting and the picture getting too distorted when moving the camera. It allows you to look and turn around quicker.
Aim Sensitivity: It's a bit of a tricky one but very important for quick headshots. It really depends on what you are comfortable with and I'd suggest raising it bit by bit. Once you are comfortable with a new setting try raising it again. If you can't get the hang of it then lower it back down and you have found your spot. Another thing to keep in mind is that a high sensitivity will make it harder in other areas like hunting, shooting of horseback, sniping etc. So it very much depends on what you value the most.
Aim/Look Acceleration: This is how quickly your cross hair accelerates when aiming from when you first move the analog stick and how quickly the camera accelerates when not aiming. I'd say it's the same as the above. It can hurt you in other areas.
Aim/Look Dead Zone: Assuming this is the same as in GTAO, dead zone is the time between when you move the analog stick and when the movement happens on-screen. So definitely turn that all the way down so there's no delay. No idea why this setting is even in the game.
Gonna focus on which weapons it makes sense to buy money-wise while still being properly geared up for a fight. Main goal is to not spend money on unnecessary sh*t.
Before I start I want to mention the Off-Hand Holster (unlocks at level 25) which allows you to dual-wield side-arms. Definitely a must-buy.
Pistols: Here we have the Semi-Auto Pistol which cheaper than the Mauser and beats it in fire rate and accuracy while only losing in the damage department. And since headshots are so important in auto aim, I'll rather take fire rate and accuracy over damage. A headshot is a kill no matter the weapon so it's better to have the higher accuracy to land the shot and the quicker fire rate if the first shot doesn't land.
Revolvers: They pack more of a punch than the pistols and are in general also more accurate while the fire rate and reload is quite a bit slower. I started out preferring pistols but here 6 months in I'll rather take the more reliable and deadly revolvers. The Schofield Revolver was the clear king of the revolvers but with the introduction of the LeMat we might have a new king. It beats the Schofield in damage, is more accurate from mid and long range though it has a slower fire rate and is incredible slow to reload. BUT unlike the standard six-shooters the LeMat holds 9 rounds which makes up for the slow reload plus the best thing about the gun; it can hold a shotgun shell which is quite f*cking handy.
A good advice is to go into Settings, then Controls, locate Automatic Pin Switching in the Targeting and Weapons category and turn it ON. That means the LeMat will automatically switch to the shotgun shell when you empty your cartridges and vice versa. Using left on the D-Pad while aiming lets you toggle between the revolver and shotgun firing modes.
Repeaters: The Lancaster is the superior weapon in this class. Compared to the Litchfield it has superior fire rate, reload and accuracy at the cost of a little fire power. With its large ammo capacity and quick fire rate it's perfect for mid-range combat. One of the new additions to the game is the Evans Repeater. While it's quite a good gun and clearly beats out the Litchfield, it's still no match for the good old Lancaster.
Rifles: The Bolt Action Rifle is a must-buy. For now it's the best rifle in the game for longe range killing and big game hunting, and it comes at a decent price so there's no reason to buy a bit cheaper rifle first. It was the first weapon I bought and upgraded.
Since the nerf of the Varmint Rifle it's no longer king of PVP, but it's still a must-buy for hunting small game. Very cheap and works fine without upgrading it in any way.
As for the snipers I prefer the Carcano over the Rolling Block but a lot of people roll with it, no pun intended. It has more damage but I'll take the faster fire rate and far superior reload speed in the Carcano. It doesn't unlock before level 50 but the Bolt can be equipped with a scope while you wait should you choose not to go with the Rolling Block.
Recommend: The Bolt, Varmint and Carcano
Shotguns: Since I've the Ultimate Edition I started out with the Pump-Action Shotgun. If I hadn't, it probably still would have ended up in my armory as a shotgun is a must-have in my book. It's considerable better than the cheaper options and also 300 bucks cheaper than the Repeating Shotgun. No reason to spend that much money when the superior Semi-Auto Shotgun unlocks at level 42.
Here we also find the Sawed-Off Shotgun. This gun is in the sidearms category and can be used to free up the long gun slots for a rifle/repeater combo. It only holds two bullets but a pair of these bad boys at close range are insanely deadly. Though you have to be very, very close to the enemy which is kind of a big draw back.
Recommend: Pump-Action, Semi-Auto and Sawed-Off Shotgun
Bow: Mandatory! Great for stealth missions and just overall a lot of fun.
Modifications: I'd would say save your money and only buy upgrades for the weapons that will be the main ones in each their classes for a considerable periode.
Ammunition: There are quite a few different kinds of ammo. First, for the pistols/revolvers/repeaters/rifles: Besides the Explosive bullets which of you can only hold 10 and should therefore be saved for special occasions, the most deadly is Express bullets with the added damage. IMO, always go for the extra damage. After that it's more depending on preferences and the weapon. High Velocity adds extra range and Split Point extra accuracy but also needs to be crafted. If I could go back, I wouldn't have purchased Split Point for that reason and the fact that when I do run out of Express I turn to High Velocity. Most of the weapons don't need the extra accuracy.
For the shotguns: Here are Explosive rounds also available and while clearly the best, again 10 is max. For everyday use we have Slugs adding extra damage, range and accuracy compared to the regular rounds. Lastly, there's Incendiary ammo which of you can hold 14 rounds. They haven't got the accuracy and range of the Slugs but packs extra damage. I would buy just because of the fact that shotgun ammo is easy to run out of so those extra 14 rounds might come in handy.
Recommended weapon load-outs for combat jobs:
Dual-wielding Sawed-Off Shotguns, Lancaster Repeater and the Bolt Action Rifle for bigger and more open maps where you really can utilize the range of the Bolt and rarely will be in close quarter combat, and if so, the Sawed-Off Shotguns will do the job.
Dual-wielding Semi-Auto Pistols/LeMat Revolvers, Semi-Auto Shotgun and Lancaster Repeater for, you guessed it, smaller maps where enemies won't be further away than you can pick them off with the Lancaster and blast them away with the Semi-Auto Shotgun when they come in close.
Like in GTAO you can do the quick 180° turn, though it's not quite as effective as you keep on going in the same direction as before you turned around if you don't press down and then up on the left analog stick. The turn is done by holding down the right analog stick (without aiming), then quickly aim to make your player turn around. It's comes in handy for when you spot an enemy behind you on the mini-map.
Don't know if it has a name but let's call it the combat dive. It's common knowledge but some might have wrote it off completely because it's not the combat roll from GTAO. While it's not anywhere near as effective, it's actually still pretty useful in situations where an enemy gets the jump on you. It's not OP like the combat roll as the enemy will quickly be able to lock on again but it will be a tough shot going for the head and that can buy you time to get one off yourself. It has to be said that if you are already really low on health or the enemy is carrying a shotgun the dive isn't of much use as they can easily get off a bodyshot before you get back up. The dive is done by pressing square while aiming and pointing the right analog stick in the direction you want to jump.
The option to expand the mini-map for good is there so why not use it? It doesn't take up at lot of space on the screen and you don't have to press down on the d-pad all the time for a better look.
Also giving a better look is going for the third person view that is furthest away from the player. It gives you a bigger chance to spot enemies coming from the sides and helps you scan around corners more efficiently all while the aiming zoom remains the same as in any other third person view, though it still might take some getting used to.
Videos of the turn and dive: