Importance of a Sharp Hook
The importance of a sharp hook can't be overemphasized. A sharp hook will penetrate the mouth of the fish better and enable it to go in past the barb. A sharp hook is not as likely to slide along the hard part of a fish's mouth and come out without sticking into it. And a sharp hook will sometimes stick and hold when a fish tries to spit it out.
Ways to Sharpen Hooks
Hooks can be sharpened to have a round point like a needle or a cutting point like a knife. There are pros and cons about each one, and some work better with different kinds of fish. Choose the best point for the way you are fishing but above all make sure the point is sharp.
A round point penetrates and slides into the mouth of the fish easily without making a big hole. Round points are best on soft-mouthed fish and are more common in freshwater fishing than in saltwater fishing. Most hooks come from the factory with a round point and can be very good, especially the ones that are super sharp. You still need to keep a check on them and sharpen them while fishing because many things will dull them.
Sharpening a hook.
Filing a triangular point on the hook makes a cutting point. The cutting edge should be toward the inside of the bend and the back or outside of the point should be flat. A hook sharpened like this cuts into the mouth of the fish when you set the hook and penetrates deeply. It can cut a hole that will allow the barb to come back out, though. Cutting points are best for fish with hard mouths and they are more common in saltwater fishing.
With either kind of point, don't sharpen it too thin on the tip. A very thin point will bend rather then penetrates if it hits some hard part of the fish's mouth. Keep the point sharp but not so thin it will bend.
To test for sharpness of either kind of point, drag it lightly across a fingernail. The hook point should catch on your smooth fingernail or scratch it, not slide along the nail. If it slides along your fingernail, it will likely slide along the hard parts of a fish's mouth. Don't put too much pressure on the hook while testing it. If it doesn't catch with very light pressure, it's not sharp enough, and you don't have to increase the pressure and risk cutting yourself.