You can set any convoy to patrol by aiming at a section of water on the nautical map and pressing . This means any enemy ship or pirate that enters its sight will be engaged. Unless you have ample military convoys you can leave scattered around the map and have a low reputation (below 25%) with other nations, chances are this achievement will require some grinding.
TIP: Create a convoy consisting of 10+ strong ships and make sure all other nations are at war with you. You can do this by attacking their convoys or towns. Once you are at war set your convoy to patrol and wait as enemy ships attack you. It doesn’t matter if you fight manually or sim the battle but just remember after each battle to press to optimize your convoy. It is also recommended you have a town under your control so you can repair the convoy if it becomes too damaged. Once you have fought 500 battles the achievement will unlock.
NOTE: This does not have to be done in a single game as it carries between saves.