This is all from my experience:
What I normally do is rotate between fighting in tournaments (placing the max amount of bets) and fighting sea raiders. This keeps money flowing and skills sharp since sea raiders drop the best loot for bandits and offer more experience. Since you're getting beat up often though it sounds like you're just starting to play the game. Here is a general guide for you to get up to the "win tourneys and fight raiders" strategy:
- Get a bunch of recruits with the money you have
- Train them up slowly. Don't go straight for sea raiders, train them on looters. Looters are the lowest level bandits and are essentially walking experience points.
- Get them to hold ground on a hill, and then ride yourself to the enemy. Take out a few, but stay safe. The point of this is that some of them will follow you for a little bit and their line won't be solid. Your troops will be able to gang up on the few first soldiers that hit their line, instead of having to deal with the full force.
- Go for sure wins. You never know when you could be knocked out, so attack parties that are lower in numbers or quality. Remember that if you're taken prisoner, all of your troops (except sometimes heros) are gone and you have to start again. Lost heros will show up in the taverns of nearby cities.
- The ladder of bandits (except for the horse-archer ones) goes like this: looters, mountain bandits/forest bandits, sea raiders. Only take on sea raiders when you have a fairly professional army.
- Join tournaments and place whatever bets you can make (you might not want to bet all the time or bet the highest amounts if money is tight) just to get the feel of them. Different areas have different tournaments (swadia has mostly jousting, nords have all foot-soldiers, Rhodoks have a mix of footsoldiers/crossbows and cavalry, vaegirs have a mix of cavalry and cavalry archers as well as foot soldiers, and khergits have all cavalry, usually skirmishers like archers)
- If you've taken a castle, garrison your highest-tier units (like knights and Huscarls) so that they don't die in battle. this will also mean that every person in your army has experience to gain, where if a huscarl or knight kills someone they get none.