x2 - do not set the hook. constant pressure does it.Most of my traps have circle hooks on them, pretty small for the most part, 1/0 sounds about right. Hook the shiner in the back. When the flag goes off, check the line to see if its angled off to the side. Take up a little slack and when you feel a little weight just start pulling it in. Don't try to set the hook. The constant pressure sets the circle hook almost always right in the lip. Just be patient and keep it steady. I use almost the same set up, but I use 20# flouro and sometimes add a few beads or spinner blades above the hook.