An explanation for Massacre, as the skill description can be confusing for some: It deals 6x110% damage to the nearest enemy. If that enemy dies, the ability chooses the next nearest enemy, dealing the same damage to them. This continues until an enemy survives the damage or there are no other nearby enemies to target. Accordingly, this helps the Mercenary deal with large crowds of small enemies, such as Lemurians.
Because the Mercenary suffers from rather low damage, the Key to mastering him is learning to use your skills not only to damage enemies, but to use the time spent invincible to dodge more powerful attacks. Learn the patterns of bosses and strong opponents and use Blinding Assault or Eviscerate to avoid most damage. Try to utilize the low Cooldown of Whirlwind on top of abusing your long amount of time spent invincible.
However, there is a more advanced combo which makes a more effective use of his abilities at the expense of some of your HP (especially when it comes to fight a bigger group of enemies). Firstly, engage into enemies with Blinding Assault, slash them with Laser Sword while they are stunned, knock them back with Whirlwind and instantly attack with another Laser Sword. Repeat this sequence until Blinding Assault goes on a cooldown. After that, Eviscerate the enemies to reset the cooldown on Whirlwind so you can easily jump away without taking additional damage. This works even better with Soldier's Syringes stacked to make the whole smoother and some healing applied to sustain your lost HP.
You can use Whirlwind to get up to places you might normally not be able to, as it does a small jump.
Items that reduce Cooldowns, such as Wicked Ring or Alien Head , are extremely effective on mercenary as they give you the ability to stay invincible nearly indefinitely.
Wicked Ring combined with decent critical chance is devastating against Magma Worms since Whirlwind will reset its own Cooldown enabling you to literally climb up a magma worm, dealing incredible amounts of damage.
A near-exploit situation can be achieved with a combination of Rusty Jetpacks and Alien Heads causing you to "fly" endlessly using Whirlwind, hovering above enemies and remaining out of reach from their attacks. A demonstration is available here.
On-hit items, such as the Sticky Bomb and especially the Brilliant Behemoth, work well for Mercenary. Whirlwind and Eviscerate put out a ton of hits, each of them calculated separately, so you get a lot of chances to activate your bonuses. The Brilliant Behemoth in particular lets you damage entire crowds with Eviscerate.
When 2 Wicked Rings are stacked on the Mercenary, It allows him to perform a constant Faux-"screw attack" by bouncing on the heads of enemies with Whirlwind. This greatly increases his ability to remain relevant past the 3rd or 4th stage, Allows him to chain Whirlwind into his massacre consistently, And removes the need for his normal CQB attack.