How do I know if I’m using the right bit?

BILL– As I related in DRESSAGE Unscrambled, many years ago Major Lindgren was giving a lecture on bits at the National Instructors Seminar. He had a graphic up on the board of all sorts of curb bits, and he asked the group how they would choose one over another. I was on the staff with him, and after the group remained painfully silent, I raised my hand and in my best Gunther Toody fashion interrupted, “Ooh ooh, I know!”
Somewhat bemused and exasperated he said to me, “OK. Why?”
“It depends on the weather,” I said.
He cocked his head, waiting for the rest of it…
“Because,” I finished, “In a storm, any port will do! “

Other than that I can offer some actual advice. Start out with something simple. If a horse comes to me without a bridle, I’m going to put him in a double jointed egg butt snaffle of average thickness. Most likely, I will add a flash not fastened too tightly (but that may just be a reflex and not really necessary).
If it works, I don’t mess around. I just use it.
I do see inappropriate bits at times in clinics. If you have a big, heavy horse that’s dragging you around, why do you have him in a fat hollow mouth? If you have a nervous thoroughbred off the track who curls his neck and won’t come out to the hand, why is he in a thin snaffle?
If you have a scrambled-up rescue project with a ton of baggage, don’t think spending $300 on an exotic bit is going to fix things. Before you do anything else, make sure his teeth don’t need to be floated.
I would also mention I am generally not a fan of rubber mouthpieces except in extreme cases. While you might think they are friendly to the horse, often they induce a lack of respect which must be overcome with more hand than you would like. Personally for that sort of horse I am fond of thick but heavy snaffles. They often play with the hollow ones, but if it’s fat and heavy, it’s still inviting while able to carry a stronger message when necessary.
As for all the variations on the market, it’s fine to experiment, but “borrow, don’t buy” if you possibly can. Lose your fortune on more lessons, not on a trunk full of metal.