Various Hooking Techniques
Although a different species, there seem to be a lot of similarities between fishing for Steelhead and Atlantic Salmon. Much has been written in the UK angling press about hooking Salmon.
Some advocate the use of a loop of 1 to 2 yards held between the finger and handle of the rod. As soon as a take is felt the loop is released allowing the fish to turn, while feeling the minimum of pressure. This seems to be a better way of hooking fresh from the tide, lively fish that are often soft in the mouth. It is also a good method of hooking fish in slower flows.
In faster streams or with larger or more aggressive fish, "fishing off the reel" is the norm. There are various ways of doing this, but the crux of them all is to have the drag of the reel set to stop over spooling, but let a taking fish pull a few yards of line with minimal resistance.
In the case mentioned, where all the fish were taking on the hang or "dangle", something which may help is to raise the rod quite high as the fly comes to the dangle. This should provide a hanging loop which gives enough slack that, when a fish takes it feels little resistance as the line straightens.
My personal preference is to keep a loop of 2 yards of line held in the rod hand. I think that this covers all situations, should a fish take slow or hammer the fly.
Having said all that, we all have bad luck. I went through a whole season, where my hook up rate was phenomenal, but I could not land a single fish. I questioned everything I was doing, from line control to hook type. The answer was that I was doing nothing different than successful seasons before or after; just pure bad luck.
Hope this helps.