Flyguy,

You almost cannot go wrong choosing a reel in your price range. Although not the best value for dollar these days, I'm still partial to Hardys. I've been using them nearly 30 years and never had a failure after hundreds of steelhead. That kind of dependability develops some loyalty. If I was looking for a new reel on a budget, I'd probably get a Ross Colorado - no disc drag. Never needed one and I like to keep my gear simple and close to traditional.

As for fly line, well I cast tradition aside since a silk flyline severely limits the places I can effectively fish, and I do want to fish. The simplest, most effective, entry level option is to buy a WF_F in your line weight. Cut 15' of the front and splice stiff loops for rejoining when you want a floating line. Buy 30' sinking shooting heads in type 3 and 4, cut 'em in half, and maybe even a piece of Deep Water Express - but don't expect that to handle so well. Splice a stiff loop to one end so you can join it to your floating line. I use a 15' type 4 sink tip for well over 90% of my winter fishing, and it's served me very well. It may do so for you.

Flies matter about this much. I always try to have one that still has a sharp point tied to my tippet. Patterns matter way more to fishermen than to steelhead, especially winter runs. I fish mainly size 2 for winter (easy to cast) sometimes smaller or larger, not that it matters all that much. I favor bright or dark patterns and usually select my fly based on hunch, and that works very well. You could select based on solunar tables and do just as well most of the time. I like marabou, flashabou, bucktail, polarbear, and other bright or dark materials in my flies. I think you should choose the ones you like the best, because then you will use them, and then you will catch fish on them, and then you will think you made the right choice without ever knowing that another decision would have also been the right choice.

In order of importance for successful steelhead fishing, the fly line is far and away the most important. A dependable reel is next, cuz a hot steelhead can melt a junk reel - I know; I could show you a couple. A servicable rod will cast the line and get your fly into steelhead territory. And lastly, you need a fly, any fly, that you can believe in. Oh, and a piece of leader material would be a nice addition between fly and line.

Good luck. See you on the Skagit.

Sincerely,

Salmo g.