Finesse Bait Fishing is the opposite end of the spectrum from a night crawler on a size 6 hook, a big split shot, a forked stick and a long wait. It is a small bait on a light line with as little added weight as possible. You might not absolutely need to wade, but for most streams you'll catch more fish if you do.
Please note: Finesse Bait Fishing is NOT the same as Bait Finesse System. Finesse Bait Fishing is delicate and subtle fishing with bait - REAL bait, as in worms, salmon eggs, etc, not "baits" as in jerkbaits, or crankbaits. Bait Finesse System (BFS) is a system consisting of rods, reels, lines, lures and techniques for ultralight fishing with bait casting rods. If that is what you are looking for, you can find it here.
Just as the Japanese fly fishing technique called tenkara is much more finesse than than western fly fishing, their bait fishing technique, called keiryu fishing, is more finesse than the way so many Americans fish.
The Japanese word "keiryu" means mountain stream. Although keiryu fishing could include any type of fishing when done in a mountain stream, the general sense of keiryu fishing is that style of fishing done with a very long rod, a very light line tied to the rod tip, "markers" on the line to signal strikes, a split shot for weight and a natural bait.
For keiryu anglers, the goal is to achieve a natural drift with a natural bait. Their baits are small - no night crawlers (or even night crawlers pinched in half). The most common baits are caddis larvae or mayfly nymphs collected from the stream they are fishing, salmon eggs, wax worms (called bee moth larvae) and red wigglers. To get a natural drift, they use only "just enough" weight to get the bait down to the fish.
The rods are long, often 17 feet or longer, which means most are two-handed rods. They are very light, though, and weigh only a few ounces. The long rod allows you to fish with your line nearly vertical, so it is not affected by current differentials. The current in a stream is not uniform, and if your line crosses currents flowing at different speeds, your bait will be pulled faster (or slower!) than the current it is in. A trout has a brain the size of a pea, but it knows when something is moving too slow or too fast.
If you cast out from shore with a short spinning rod, your line will cross a number of different currents, so it is certain that your bait will be moving too slow or too fast relative to the current it is actually in.
Worse, if you only fish pools and use enough weight to anchor your bait to the bottom, you don't have a chance to catch any of the fish that are in the riffles and pocket water. Only a fraction of the fish in a stream are in the pools. I see a few bait fishermen in the streams I fish, but I never see them anywhere but sitting alongside a pool. I never see them catch many fish, either. There's no finesse in having your bait anchored to the bottom and waiting for a fish to find it!
The finesse bait fishing that Japanese keiryu anglers do uses light (to extremely light) lines. There are keiryu rods designed for use with lines of less than one pound breaking strength, and nearly all are limited to no more than 5# test line. The line, whether specific keiryu fishing line or fly fishing tippet, is much thinner for a given pound test rating than spinning line. To achieve the maximum finesse, the thinnest line must be used. There's a reason fly fishermen use very light tippets. Bait fishermen should use very light tippets for the same reason! Lighter lines allow a more natural presentation, and a more natural presentation catches more fish.
With the line nearly vertical, even the
most subtle bite is signaled by the markers attached to the line. There
are a couple types of markers, but the lightest is a
thin, slightly fluffy yarn that is brightly colored and does not absorb
water. The yarn from your wife's knitting bag is NOT going to work. You'll need special yarn intended just for keiryu markers.
Three or four knots of the marker yarn are tied around the line, positioned so that the lowest marker is above the water's surface. The knots are tied so that the markers can be moved easily, but will stay where you put them. When a fish takes the bait, the markers clearly show that the line either stops or dips or moves to the side.
For finesse bait fishing, with a small bait, light wire hook, tiny split shot and gossamer tippet, you will be able to detect the most subtle take - and some are indeed subtle. When fishing in current, hold the bait back just a bit, so your line is drifting a bit slower than the surface current. The current on the bottom is slower than on the surface, and you want your bait to be drifting at the speed of the current around it.
Occasionally, the take will not be at all subtle, and you markers will dip violently or shoot to the side. Often, though, the line will just stop. That is almost immediately obvious because the angle of the markers will change, going from the lowest marker being furthest downstream, to vertical, to the lowest marker being upstream. That could happen when the bait or split shot gets caught on a rock or when a fish takes the bait but then doesn't move.
When that happens, just tighten the line by moving the rod back upstream (quickly but not forcefully). If the bait is caught on a rock, that generally frees it. If it is a fish, the light wire hook penetrates so easily that no "hook set" is necessary, and the fish's first reaction to pull away provides all the hook set that is necessary. In essence, when the markers just stop, you don't know at first if it is a rock or a fish. Tighten the line. If it is a fish it will wiggle!
The setup is so
sensitive that you can react and set the hook before a fish has time to
swallow the bait. Deep hooking is thus not at all common, so catch and
release bait fishing is quite possible.
The great drifts you can get with a very long keiryu rod, together with the extremely sensitive bite detection means that keiryu fishing really is the ultimate in finesse bait fishing for trout in streams.