Close-Hauled is defined as a heading of about 135° either to the left or to the right of the direction in which the wind is blowing.
Close-Hauled can be used to describe the heading of a ship - I.E. the ship is heading ~135° off to either side of the wind's direction.
It can also be used to describe the position of an object relative to the ship. For example, if an enemy ship is at Close-Hauled, we must turn ~135° off the wind's direction in order to head directly towards it.
If the wind is blowing from east to west, as occurs often in the Caribbean, Close-Hauled would be both North East (NE) and South East (SE). Of course, since wind direction tends to change, the direction of Close-Hauled changes with it. It will always be 135° off the wind's current direction, whereever the wind is heading at the time.
The term "Close-Hauled" is also sometimes used to describe all angles between Beam Reach (90° to the wind) and Into The Eye (sailing directly into the wind). In other words, it is a catch-all term meant to reflect sailing in a direction where the wind is coming at least partially from the front side of the ship, causing the sails to behave abnormally, or fail entirely.
Close-Hauled is a difficult angle for all Ship Types. It is at this point that the sails stop catching any wind, and begin to struggle to prevent the wind from blowing the ship backwards. Even Fore-And-Aft Rigged ships have trouble generating forward motion when the wind is coming at this angle.
As a result, all ships will sail very slowly, if not stop altogether, when heading towards Close-Hauled.
In the original game, virtually all ship types will stop dead in the water when Close-Hauled. This is particularly true for larger ships. In fact, if the wind is powerful enough, it may actually cause a ship to sail "backwards", i.e. be pushed in the direction the wind is heading at a speed of 1 or more leagues. This is particularly true for the largest ships, the Galleon and War Galleon, which may even start sailing backwards at a slightly less acute angle like Close-Hauled Beam Reach.
The Sloop and Pinnace, when fully-repaired and sailing in medium or light winds, may actually continue sailing Close-Hauled. Nonetheless, they will not make more than 1 or 2 leagues. If this is possible, these smaller ships can use Close-Hauled as an escape direction, as no other ship can follow them at this heading.
Sid Meier's Pirates! (2004)Edit
In Sid Meier's Pirates! (2004), sailing Close-Hauled will stop all larger Square Rigged ships dead in the water, though they will still be able to turn very slowly. If the player lets go of the controls, the wind may force the ship to turn back towards Beam Reach. You can still try to turn Into The Eye if you keep pressing the turn button.
The small Fore-And-Aft Rigged ships like the Pinnace Class, Sloop Class and Barque Class may still be able to get some (low) speed sailing at this angle. This is very useful when trying to escape combat, as no other ship can follow them in this direction.