Have to consider probability of profit. Have to consider how much you're willing to risk for a given return. Base capital might be fixed, but if you're trying to turn $1000 into $2000 in the next month, there's no way to do that without accepting a very high likelihood of not making a profit or worse.
Of course you have to look for positive expectancy trades. I believe that for a retail trader I believe sharpe ratios are not the right way to measure risk. It will lead to suboptimal portfolio allocations to manage the noise unless you have to fund a fixed liability (like paying your rent every month).
Hedging is what bank traders do in order to transfer the risk of credit operations they engage in to other participants in the financial markets (like other traders). Hedging is primarily done using a combination of spot and the derivatives market or entirely via the derivatives market. Some traders think that hedging consists in buying and selling the same instrument simultanesouly, but that represents a redundant situation. By using a combination of the spot market with derivatives, traders can take advantage of the fact that spot prices vary linearly while derivative prices vary nonlinearly.
Hedging is useful when you understand types of risk you face and why you want to mitigate particular risk. For me hedging is the hardest part of risk because dealing with uncertainty boils down working with real-life probabilities which often are not quantifiable.
Ironically, hedging is the easiest part of trading once you understand the partial derivatives of the Black-Scholes model. It's more difficult to learn, but it's easier to apply than many other trading methods that are seen as simpler.
No one has given you a good example so far I believe. I don't think anyone on this forum really knows how to. I have asked this question before to get practical answers but I did not get any. https://www.elitetrader.com/et/posts/5266497/ My take, hedging is nothing but: take less risk with same instrument. I have heard only one example of oil companies hedging some chemicals for refining etc...but I don't remember it quiet well. There has been no other examples I can tell were useful and this is why I think you won't find any either. One more thing: IF you find a proper hedge you have found gold.