The concept of "mermaid" is typically spelled in ASL.
Recommended way to sign Mermaid: wrists crossed, palms up, bend and unbend the hands twice at the large knuckles. This represents the tailfin of mermaids. Note that this sign is not well-known by many in the Deaf Community -- you will need to introduce it and provide context every time you decide to use it with a new audience or conversation partner.
When discussing or telling stories about mermaids, after introducing the concept, it is common to depict them using a "1"-handshape and/or a palm-down flexible flat handshape "swimming" through the water.
We (Casar Jacobson) and I discuss "mermaid" on the video: Random ASL Lesson (Part 2) https://youtu.be/JPSqoekCMHo
Specifically, at five minutes and 28 seconds: https://youtu.be/JPSqoekCMHo?t=329
However be aware that there are ZERO
signs for mermaid that are instantly recognized by the general Deaf community as meaning specifically "mermaid" out of
context.
The topic of "mermaid" just isn't discussed enough by the broader Deaf Community for a consistent, widely
recognized sign to emerge.
The compound word "mermaid" is formed from "mere" (sea), and "maid". Thus an approach would
be to sign "sea" (using the "ocean" sign) and then sign "woman."
Gotta say though, I loved the depiction that Casar
did at the 5 min 32 seconds point of the video https://youtu.be/JPSqoekCMHo?t=332 when she put her non-dominant hand to
the side of her head and wiggled her dominant arm.
Notes:
Note: I've seen someone sign "mermaid" but slapping their hands together -- but that approach looks more like a common sign for "seal."