I wash my wool like I wash my hair, hand hot using a detergent. I find that this works better than a soap, even a gentle woolmark soap. A few drops of washing up liquid or shampoo seem to work well in a gentle wash cycle.
Wash wool on its own, spin at low revs (600 on my machine) and dry flat on a towel away from direct heat and don't stretch it out wet.
If you hand wash, don't agitate too violently, just let it soak for a while, and never wring. I squeeze a balled up item very gently.

The official care pages for my brand of Merino is a good read.